Newspaper article St Louis Post-Dispatch (MO)

Sears' Bankruptcy Was No Surprise, as Retailer Has Struggled for Decades

Newspaper article St Louis Post-Dispatch (MO)

Sears' Bankruptcy Was No Surprise, as Retailer Has Struggled for Decades

Article excerpt

For many of us baby boomers, Sears' bankruptcy filing brought back memories of fantasizing about the toys in the big Christmas catalog.

Don't forget the Toughskins jeans that were every boy's wardrobe staple, and the Kenmore appliances that filled many a middle-class kitchen.

People under age 40, meanwhile, wonder what the fuss is about. Sears lost its grip on middle-income consumers' wallets years, if not decades, ago, and perhaps the only surprise is that the slide into bankruptcy took this long.

It's natural to look for villains when a once-dominant company collapses, and hedge fund mogul Eddie Lampert would be a candidate. He's Sears' controlling shareholder and former chief executive, and he had the brilliant idea in 2005 of combining Sears and Kmart, another struggling retailer.

Revenue has dropped by two-thirds since the Kmart merger, and Lampert's cost-cutting moves have hastened the decline. Last December, for example, Sears stopped buying television ads and its holiday-season sales fell 18 percent.

On the other hand, Lampert lent the company $500 million last year when nobody else would. He held on to his Sears investment to the detriment of his personal fortune and his reputation as a shrewd investor.

Under another owner, Sears' descent into bankruptcy might have been faster and more chaotic. "Lampert thought he could make money by not spending money; there was a lot of hubris," said Jason Long, a retail consultant with Shift Marketing Group in St. Louis. "But could anybody have saved it? Probably not."

Amazon gets blamed for most retail failures nowadays, but Sears was in decline long before e-commerce was a thing.

Its first disrupter was Walmart, which won many of Sears' price-conscious core customers. Then big-box stores such as Home Depot challenged Sears' dominance in categories such as appliances and tools. …

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