Sears might be going belly up

[tonyb]

Ex-bankruptcy shyster here (still licensed--just not practicing anymore, Thank God). Yeah, a Chapter 11 is a reorganization, a Chapter 7 is a liquidation*. I did mostly consumer work, where the Chapter 11's were usually just a prelude to a Chapter 7 when no viable plan of reorganization could be produced, but business bankruptcies aren't always that way--witness GM and Chrysler.

Edit: *Chapter 13's are also a reorganization, intended for consumers, but some consumers with enough debts or assets can end up in 11 instead.

Thanks. Looks like that “prelude” to eventual liquidation is a likely scenario. It’s sorta like all those miserable married couples who go through “counseling” together before heading to their respective divorce lawyers separately.

 

[tonyb]

Agreed. Eddie Lampert is a preening, prancing fool. The only reason those kidnappers let him go was that they couldn't stand to listen to any more of his BS.

The more I read about that Lampert fellow the more clear it becomes why Sears is in its present condition.

Let it be a lesson in what happens when people in power are so wedded to any particular economic philosophy that it blinds them to its shortcomings.

Alas, the lesson is wasted on the true believers.

 

[Fading Fast]

Going back and rereading this thread from the beginning is like watching an old car rust away in a field.

It's been an incredibly slow, obvious-for-years and painful death. In one of the recent articles I read, it said the shelves in some of its stores were empty - nothing says more about a failing business model than empty shelves. I knew one of the local grocery chains was dying when the same thing happened as NYC groceries (like most) are always, always, always chockablock with goods as they need every single dollar of revenue in that - like most retailing - tiny margin business. Sears is just another example of how even the best business is subject to the creative destruction of the viciously competitive market.

 

[MissMittens]

When Sears ditched the catalog, they should have placed it online and gone full e-commerce, maintaining their warranties through brick and mortar "warranty locations" located in selected former stores, while shutting down the rest.

In fact, Sears already has the inventory and locations to still do this, and survive in some form.

Sears helped pioneer the public internet through their ISP, Prodigy, which many of us used at one time or another. Their failure to connect the dots between the lack of catalog sales and their booming ISP at the time, was their most critical mistake.

 

[Zombie_61]

Ex-bankruptcy shyster here (still licensed--just not practicing anymore, Thank God). Yeah, a Chapter 11 is a reorganization...

Thanks. Looks like that “prelude” to eventual liquidation is a likely scenario...

I don't know how much time a Chapter 11 would allow them for a reorganization, but they've been circling the drain for so long that I have a hard time imagining they're going to be able to suddenly pull things together successfully at the last minute. Time will tell, I suppose.

...In one of the recent articles I read, it said the shelves in some of its stores were empty...

As I mentioned upthread, that has certainly been the case in at least two stores here in southern California. More than just empty shelves, there were entire sections of each store that were vacant--no merchandise, no shelves, nothing but empty space. One of those stores had even gone so far as to hang temporary curtains around one of those sections to present the illusion they were remodeling, but a quick look revealed they were using that space to store the shelves they had removed from the other empty sections.

 

[BobHufford]

Last time I was in the local Sears they had sections that looked like they were using the display areas for warehousing. Stacks of mattresses, etc. No curtains and right by one of the entrances. Sad...

 

[tonyb]

^^^^^
Same story here. Hardly confidence inspiring.

 

[LizzieMaine]

There's the kind of death when you're dead, and there's the kind of death where you think you're not.

 

[3fingers]

There's the kind of death when you're dead, and there's the kind of death where you think you're not.

I have become fairly confident over the last few years that survival was never the goal. The whole plan has been to bleed off the valuable assets, rob the other shareholders and walk away just as the whole thing collapsed and there is nothing much of value left. It is basically a real estate scam. If true, Fast Eddie should be drawn and quartered by the shareholders and retirees.

 

[scotrace]

I'm still getting daily promotional emails from SEARS as though nothing is wrong.

 

[MissMittens]

I'm still getting daily promotional emails from SEARS as though nothing is wrong.

Same form Kmart

 

[Peacoat]

Back in the 70s when I first started developing a good set of mechanic's tools, I had two primary choices: Craftsman or Snap On. They were about the same in quality and price with Snap On being perhaps a little more expensive due to the delivery feature of the brand. Both had lifetime warranties on their tools. I chose Craftsman, mainly because I could be at the closest Sears store in 15 minutes if I needed a tool for a particular job, which I often did.

During college I made a little extra money doing tune ups and other minor repairs—shock absorbers, brake work (which I disliked because it was dirty), and rebuilding carburetors (which I liked because it was relatively clean).

I now have several thousand dollars worth of Craftsman mechanic's tools and power tools, collected over the years. The mechanic's tools are kept neatly organized in a large tool chest and a tool cabinet on which the chest sits. Both are Craftsman, of course. The chest, with all of the tools I keep in it, is too heavy to pick up and move around. I still have all the original tools I purchased over the years, never having had to obtain a replacement because one broke.

Several years ago, when I noticed Sears was having problems and probably would not survive, I vaguely wondered what I would do if some of my tools needed replacement and Sears was no longer in business. Then I sorta chuckled with the realization that not having needed a replacement in over 40 years, I was unlikely to need one in the next 40 years. It would probably be my great grandchildren, as yet unborn and not yet even thought of, who might face that problem. *

Having had a long and satisfying relationship with Sears through its Craftsman brand, it does sadden me to see such an icon be brought to its knees.

@MissMittens nailed it in her post above. If Sears had gone to an e-commerce model after ditching the catalog, things may well have turned out differently.

___________
*A few weeks ago I was in an Ace Hardware store and saw a section containing only Craftsman tools. I have since read that the brand is a valuable asset of Sears and will continue to be available in other independent stores, such as Ace, True Value Hardware and several others.

 

[Zombie_61]

I'm still getting daily promotional emails from SEARS as though nothing is wrong.

Same form Kmart

And yet, on Monday a number of websites reported they're closing another 142 "unprofitable" Sears and Kmart stores throughout the U.S., and that Edward Lampert has "stepped down" from his position as CEO. I'm guessing Mr. Lampert is leaving the sinking ship with the nicest lifeboat anyone has ever seen.

 

[LizzieMaine]

In a just world, Mr. "LAHM-pair" (as he insists on pronouncing it, unlike anybody else from Rye, NY) would be "stepping down" an open elevator shaft.

 

[Fading Fast]

Owing to my business in finance, I have to say this: neither my clients nor I have or have had any investments in Sears. Okay, the lawyers are now happy.

I've only really followed Sears as a Fedora Lounge story - what happened to a store that, when I was a kid, was a fading but still meaningful part of American culture - as the calculations involved in investing in a failing retailer are just not part of my investment philosophy, strategy and business. Hence, I've read the newspaper accounts all along and that's about it.

A thought, though, if (as it's been speculated) Lampert is guilty of violating security laws - self dealing, violating his fiduciary responsibilities, etc. - then it is the most out-in-the-open bank robbery ever: His role in Sears vis-a-vis his hedge fund and personal funds has all been heavily reported all along. However, if the regulators (and I can think of five different government and parastatal regulators who should have been, well, regulating him and Sears throughout) let it happen (let him get away with illegal activity), then they should be shot along with him.

If he's guilty of something (again, I have no idea one way or the other) - he should be charged, tried and, if found guilty, go to jail. But the same should happen to all those regulators we pay our tax dollars to who are supposed to be enforcing the security rules, regs and laws and protecting honest investors. Lampert is no Bernie Madoff - tucked away from public view with a back-alley accounting firm hiding his shenanigans - but one of the most-visible architects in one of the most-visible corporate failing in the last half century. If the regulators failed to catch illegal activity in this one while it was happening - then we all deserve a tax refund for their salaries and bonuses (and, yes, many government regulators get bonuses).

 

[belfastboy]

Back in the 70s when I first started developing a good set of mechanic's tools, I had two primary choices: Craftsman or Snap On. They were about the same in quality and price with Snap On being perhaps a little more expensive due to the delivery feature of the brand. Both had lifetime warranties on their tools. I chose Craftsman, mainly because I could be at the closest Sears store in 15 minutes if I needed a tool for a particular job, which I often did.

During college I made a little extra money doing tune ups and other minor repairs—shock absorbers, brake work (which I disliked because it was dirty), and rebuilding carburetors (which I liked because it was relatively clean).

I now have several thousand dollars worth of Craftsman mechanic's tools and power tools, collected over the years. The mechanic's tools are kept neatly organized in a large tool chest and a tool cabinet on which the chest sits. Both are Craftsman, of course. The chest, with all of the tools I keep in it, is too heavy to pick up and move around. I still have all the original tools I purchased over the years, never having had to obtain a replacement because one broke.

Several years ago, when I noticed Sears was having problems and probably would not survive, I vaguely wondered what I would do if some of my tools needed replacement and Sears was no longer in business. Then I sorta chuckled with the realization that not having needed a replacement in over 40 years, I was unlikely to need one in the next 40 years. It would probably be my great grandchildren, as yet unborn and not yet even thought of, who might face that problem. *

Having had a long and satisfying relationship with Sears through its Craftsman brand, it does sadden me to see such an icon be brought to its knees.

@MissMittens nailed it in her post above. If Sears had gone to an e-commerce model after ditching the catalog, things may well have turned out differently.

___________
*A few weeks ago I was in an Ace Hardware store and saw a section containing only Craftsman tools. I have since read that the brand is a valuable asset of Sears and will continue to be available in other independent stores, such as Ace, True Value Hardware and several others.

After I finished university, tired of reading & writing I decided I needed to learn a new skill and chose to become an auto mechanic. Not even owning a screw driver I began to accumulate a tool kit. For me it was a choice between Snap-On and Craftsman. I chose Craftsman as it was much cheaper....felt badly at the time as all "real" mechanics used Snap-on. Purchased just one Snap-On tool as a gesture...a gasket remover. Still have all my tools, 50 years later even the electric,saws, drills, sanders etc.
The mechanics thing did not take.....as I tired of coming home, covered in grease and scraped knuckles, I packed it in and got an office job.

 

[Peacoat]

After I finished university, tired of reading & writing I decided I needed to learn a new skill and chose to become an auto mechanic. Not even owning a screw driver I began to accumulate a tool kit. For me it was a choice between Snap-On and Craftsman. I chose Craftsman as it was much cheaper....felt badly at the time as all "real" mechanics used Snap-on. Purchased just one Snap-On tool as a gesture...a gasket remover. Still have all my tools, 50 years later even the electric,saws, drills, sanders etc.
The mechanics thing did not take.....as I tired of coming home, covered in grease and scraped knuckles, I packed it in and got an office job.

When I started my mechanic's toolbox, Craftsman wasn't that much cheaper. Evidently Snap On has gone up in price over the last number of years.

The reason "real" mechanics use Snap On is the delivery service. They don't have to leave the service area to get a tool. It is delivered to them.

I didn't like the dirty work either. That's why I limited my repair work to relatively clean jobs.

After I started graduate school, I no longer had the time to have a part time business, so that ended. Still did work on my own cars and the cars of a few friends. Back then I had a 350 cubic inch GTO that needed a tune up every 5,000 miles or so. That was about every three months, so I got plenty of work on my own car.

Now everything is computerized and the mechanics are no longer called mechanics. They are called technicians, and rightfully so. My cars have been worked on by technicians for many years now. I never turn a wrench on any of my cars anymore. I leave it to the experts.

 

[belfastboy]

When I started my mechanic's toolbox, Craftsman wasn't that much cheaper. Evidently Snap On has gone up in price over the last number of years.

The reason "real" mechanics use Snap On is the delivery service. They don't have to leave the service area to get a tool. It is delivered to them.

I didn't like the dirty work either. That's why I limited my repair work to relatively clean jobs.

After I started graduate school, I no longer had the time to have a part time business, so that ended. Still did work on my own cars and the cars of a few friends. Back then I had a 350 cubic inch GTO that needed a tune up every 5,000 miles or so. That was about every three months, so I got plenty of work on my own car.

Now everything is computerized and the mechanics are no longer called mechanics. They are called technicians, and rightfully so. My cars have been worked on by technicians for many years now. I never turn a wrench on any of my cars anymore. I leave it to the experts.

Yep, me too. I was a VW guy, owned 8 of them over the years. Sold my last one around 1990 and have not worked on a car since. I have a Hyundai right now, 8 years old, 150,000 miles and the only work done is regular oil change, brake job at 100,000 and new plugs around the same time. Autos are one of the few mechanical purchases that are so much better now than in my youth.

 

[tonyb]

Yep, me too. I was a VW guy, owned 8 of them over the years. Sold my last one around 1990 and have not worked on a car since. I have a Hyundai right now, 8 years old, 150,000 miles and the only work done is regular oil change, brake job at 100,000 and new plugs around the same time. Autos are one of the few mechanical purchases that are so much better now than in my youth.

I preface by acknowledging that I really dig old cars. I fully appreciate how a person can get downright enamored with the things.

Still, when I hear a person prattle on about “how they don’t make ’em like they used to,” I at least think to myself, if not say out loud, “and thank the god of your choice for that.”

How we forget about all the broken-down cars on the side of the road, the ring and valve jobs at 50,000 miles (if that), the annual tuneups, etc., etc., etc.

Most of those roadside breakdowns were simple enough to address with the tools and supplies I carried with me in the car BITD, but I’m now of an age and station that I would rather not risk having to crawl under a car alongside the road every time I head out.

 

[LizzieMaine]

Modern engines are great. Modern bodies, at least here in salt country, are crap. I've had to junk three cars in the last fifteen years, all of which had engines that ran flawlessly well over 175,000 and had bodies that had the physical integrity of a stale graham cracker.

As for VWs, I'll never forget the best thing about mine -- whenever I skidded off the road in the slush, I could always push it out of the ditch by myself.