(NewsTarget) Things are not looking good for once iconic retailer Sears, who has announced they will be closing hundreds of stores, laying off thousands of employees and selling off millions in assets to stay afloat.
Since 1925 Sears was at the forefront of brick and mortar. Many remember them for their archetypal ‘Wish Book’ or their mostly-American-made Craftsman tool brand that carried a lifetime warranty. Their stores were anchors for virtually every American shopping mall. These game changers earned them recognition for being innovators, but the days of being at the forefront of the market are long gone, as the company heads closer to falling off an economic cliff that even Donald Trump can’t stop.
You can blame Amazon or the age of the internet, but over the years Sears has lost its competitive edge. Many mistakes have been made but one of the most detrimental was allowing competitors like Home Depot, Lowe’s, and Best Buy to invade their monopoly in the home appliances category. Sears was once the dominant force for families who were looking for high quality refrigerators, washers, and dryers at an affordable price. Sears also trained their employees to be experts on the products in their field, and customers walked away feeling like they were truly taken care of. It was like a family. Today however, Sears is just an afterthought, and because Sears and most retailers did away with thoroughly training associates, customers now choose to go online to compare product and competitor options. This is further proven by the number of storefronts that have shut their doors over the years.
Another costly misstep came in 2005 when Kmart and Sears merged to create the third biggest retailer in the United States. The merger left a footprint of almost 3,500 retail stores, 1,100 specialty stores, and $55 billion in annual revenue. Most retail experts were left scratching their heads when the two companies combined, as Kmart had been in serious decline for the last decade and Sears was beginning to follow in Kmart’s footsteps. Today Kmart is practically dead and continues to close hundreds of stores across the United States, all the while Sears continues to burn cash just to stay afloat.
The final nail in the coffin for Sears was the choice not to reinvest millions of dollars into its aging stores which desperately needed a “facelift” and a new assortment of products for the changing market. Instead, Sears CEO Edward S. Lampert spent billions of dollars on ‘share buy backs,’ a strategy used to give investors the appearance of improved earnings. What more would you expect from a CEO who got his start at money laundering firm Goldman Sachs.
In a recent move of desperation, Sears decided to sell its most recognizable brand, Craftsman, to Stanley Black and Decker for $900 million. Sears originally purchased the brand for $500 back in 1927. This is just the beginning of the sell off, as Sears will eventually be forced to dump household name Kenmore appliances to finance its crushing debt.
Sears continues to be a hollow shell of its former self. What was once an imprint of almost 3500 stores has now shrunk to 1,500, leaving hundreds of thousands without work and having a disastrous impact on working class Americans, communities, and the environment. The end of an era is near.
We can’t fault Sears CEO Edward Lampert for everything; he did get one thing right in his tenure at Sears. In 2010 Lampert bragged that Sears would be ‘unrecognizable’ in 30 years, however I don’t think this is what he had in mind.