Yesterday, unconnected with the above, the company announced a 99% fall in earnings but more disturbingly an approximate fall of 5% in sales in stores that had been trading a year or more.
Sears is in an uncomfortable place. It means little to its customers, it lacks the price story of Wal Mart or the style story of Target. It means little to its staff beyond the check and appears to have lost any of the sense of pride in its endeavors that seem to characterize good businesses.
The truth of it is that restoring a retail business to health requires the right merchandise, the right sourcing and logistics, the right environment and the right attitude among all the people the customer faces.
You save money and create efficiencies through the prism of these needs as doing it any other way is merely akin to peeling a bad onion. By and large they don't get any better the more you peel.
Sears retail estate is in pretty poor shape and there are clearly limbs that need lopping from the tree and others that require nurturing in a somewhat intense fashion.
One problem maybe the ownership. Sears is controlled by people with heritage in hedge funds who, as a group, prefer the notion of 'strip and spruce' to that of planting seeds and encouraging growth. Sears like many iconic businesses before it will discover it has no inalienable right to exist. It does have the 'infrastructure impact' that demands airlines are saved nor the localized and massive economic impact of the auto business. It's said that many newer mall owners don't want Sears as an anchor and if that's true the writing may be on the wall.
To survive Sears needs to spend on its estate, its merchandising and its people first. Efficiencies only benefit businesses that actually exist.
1 comment:
There is an opportuntity for Sears but it will take another dip into EL's bag of money. Although the Sears brand and experience is at the bottom looking way up at Target, Kohls, JC Penny, Walmart and Home Depot, there is tremendous vale in the Sears Home Service brands and the Craftsman and Kenmore brands. This is simple math. Buy Home Depot, put the power of those brands in the power of that brand and sell off the sick and tired real estate holdings. Sears should go peacefully and with the respect an american icon brand deserves.
Many 80's bannds went away when their time was up. Why not Sears?
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