The seemingly impending demise of the once dominant American retailer, Sears, took another significant step in that direction on Tuesday. The news media is filled with reports that Sears has rejected a proposal from CEO Eddie Lampert who was attempting to put together an investment proposal through his private equity company to salvage Sears.
The Sears Board of Directors informed the judge overseeing their bankruptcy case that they intend to move forward with the liquidation process. This is the final step taken before a company dissolves, and Sears will now take the necessary steps of liquidating inventory, shutting down stores, and laying off employees.
It is a very sad day for the American retail business landscape because Sears was a huge player for over 100 years (126 years to be exact) and the end of that company and some of the brands associated with it, is an end of an era in retail. The company consolidated with Kmart about 14 years ago and that proved to be one of the key factors in the demise of Sears.
In earlier coverage of this story, I shared how Sears was a store that my parents shopped in frequently for tools and appliances. It is unfortunate that many people thought of Sears for those products, and not for anything more. It also did not help that Sears did not connect with consumers that were not my parents age or older, they lost that next generation of families as well as their children who are now young adults.
The aggressive marketing of Wal-Mart, Target, and Amazon siphoned those customers away from Sears and Kmart ; and neither one could recover from that setback. My local area is a good representation of that effect, the Sears has been there for decades and the Target has been there for less than twenty years. The Target location is consistently crowded, jammed. The Sears has been so empty the last five years that I would drive by and wonder if it was closed.
I read a post on social media earlier that was effectively stating that Sears will cease to exist after 116 years, which is longer than Wal-Mart, Target, and Amazon have been in business combined. The “Amazon effect” is hurting several brick and mortar retailers that have failed to innovate. Sears missed the window to innovate their business model.
Sears should have built up their website and used their physical stores as essentially distribution centers where the customer could come and pick up items, especially expensive items that they would not want shipped. Sears owned so much of the real estate that their physical store locations are located upon that they controlled so much of the costs of not having to lease or rent space from a commercial real estate landlord, that they could have reaped so many benefits from the order online, pick up in store scenario. They did not capitalize on that in a forward-thinking way, by the time they went that direction it was already too late to recover the business.
However, even Jeff Bezos, the CEO of Amazon conceded recently that one day he expects even Amazon to perish, to cease operations. That seems unthinkable to so many, myself included, but his full quote explains further that essentially everything has a shelf life, and at some point Amazon will outlive its usefulness.
Sears managed to cobble together a pretty good run when all things are considered in the retail industry space today. It was such a huge part of Americana, the trips I remember as a kid to Sears to buy a TV, a dishwasher, or going with my Dad to buy tools for a home improvement job. I also recall before I left for college my Mom taking me there to get clothes and lamps to get my dorm room all set up.
Those memories will be all I have as well as others will have left of Sears, it will join the list of retailers and in a similar fashion to Toys R Us, who were crushed by a debt load that was unsustainable. In a similar fashion, an ex-CEO of Toys R Us attempted to save the chain from going under, and was rebuffed by the board and the court in charge of the proceedings.
Eddie Lampert put together a $4.4 billion package to try to save Sears, or at least part of it. The number was deemed to be not adequate enough to effectively salvage the company for a sustained period of time. Lampert will receive criticism for his handling of the last years of the Sears brand. His involvement with a private equity firm has already drawn scrutiny from industry analysts. His next venture remains to be seen, but this loss is going to follow him around for a long time.
My own personal last visit to my local Sears store, which is slated to close very soon, was in mid-November. I went to get work clothes and active wear at greatly reduced discounts. The store was a wreck, and it was sad walking through empty corridors and empty areas of this huge store. The memories came flooding back from my childhood one last time, of days that were easier, simpler times. That is where those memories will stay, like Sears did, frozen in time. A piece of America is gone and is never coming back.