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Sprint Corporation Message Board

  • Manuel_Dexterity Manuel_Dexterity Aug 5, 1999 8:09 AM Flag

    Sears = Wards??

    Sorry folks but if you want to predict the future
    I think the Ward's story has a lot of what is in
    store for S. First the credit card portfolio went out
    of control, higher bad debts. But this is what drove
    the sales increase, not some Martinez merchandising
    miracle. Then the stores were totally focused on
    incremental ad ons, like credit card protection, warranties
    and the like. The store managers (bonus linked to
    this) and selling staff turned into hucksters vs.
    customer service driven associates. It was a turn off to
    walk into a store and have all of these knaves
    pestering you for this crap.

    Then like Bernie
    Brennan did at Ward's cut your staff and we don't care
    how you do it. The old boy network stayed in place
    keeping the incompetent while getting rid of those that
    challenged the status quo. This will continue in cycles,
    needed due to the bloat at Hoffman Estates, but the
    wrong way to do it.

    The next step will be a
    reduction in capital spending like Wards, the older stores
    in the B and C malls will really start to look
    shoddy. Store payroll will then be cut in an earnings
    spiral. The private label soft lines will not be able to
    compete with brands at Kohls and Target. The hardlines
    with low margins and cut throat competition will be
    pressed to the limit forcing more credit to start the bad
    debt cycle again.

    I agree with those posters
    that a price of $20.00 or less is in the future, maybe
    by year end. The only difference is Sears sold their
    tower a few years ago, Ward's just did it, in
    bankruptcy.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • No one needs Maintenance on televisions. To pay
      10 years for an appliance M.A. the customer could
      have purchased several new appiances.

      The M.A.
      is almost ALL PROFIT. The customer gets nothing
      worthwhile! The value of the M.A. is misrepresented to the
      customer through LIES!!!!

      You are a thief ANCRLONG.

      You think lying to sell a product is o.k.
      I have
      gone to many Sears stores and I 'know what to ask' and
      I can get many, many salespeople to LIE when
      explaining the M.A. to me!!!!

    • In 1998 Sears had $41.3 billion in sales and 1 billion dollars in profit. Wards had $3.64 billion is sales (down from $4.5B) and almost 1 billion in losses. Source: 08/99 Chain Store Age

    • credit card went south for a long time in Wards
      w/o any control they gave credit cards to anyone
      until forced to retrench by their new owners.... S
      throttled back credit and raised credit standards as soon
      as problems became relevant (that = about 2 years of
      'looser credit standards', significant difference in
      reaction!

      store managers bonus is based largely on store
      profitability and customer service scores stores aren't
      profitable if they don't sell merchandise. the sales
      managers bonus is based on customer meeting sales plans &
      modified up/down some percentage based on customer's
      ratings called service scores. and since you can't sell
      add ons if the associates didn't sell merchandise
      that statement is contradictory too!!

      #1
      customer complaint (year after year) not enough associates
      on sales floor...interesting to note your's is too
      many associates bothering me...i think an elegant
      solution to this dichotomy is a virtual associate that
      would materialize beside you w/ the anwers to the
      questions you were just about to ask (under your breath or
      in your own mind because you don't want to be
      'knaved' to death)...

      i agree there is 'pork' in
      the hoffman barrel, but it is so hard to cut back w/o
      sending all the wrong signals to the investors,
      customers, & associates, i think that's why most publicly
      held companies & government bodies over staff... the
      flip side to this is the reduction of work force
      almost always requires a near-total redesign of the
      internal processes something that is also very scary to
      insiders. not many people like change so it takes dire
      circumstances, generally speaking, to get the ball
      rolling...

      capital spending, you obviously don't watch S much 'cause
      BILLIONS (i believe the number is ~$4B in 1999 alone) have
      been spent in the last 3-4 years remodeling the
      stores, with a very high (i believe a percentage in the
      90's) of stores have or will be remodeled by the end of
      2000. they did start w/ the larger and/or more
      profitable stores were first but that would be your best
      bang for the buck!

      private brands are doing ok
      (canyon river blues etc.) and are will do better under
      the new and more aggressive advertising.

      and
      finally the most telling line in your post, the last,
      shows the difference in S & Wards... in took bankruptcy
      to wake up Wards and S sold their tower years ago
      when it was clear that it was the right thing to
      do!!!! thanks for the closing statement to tie my
      rebuttal together, how ironic we have the exact same
      'closing statement' and yet we see it as 'proof' of our
      opposite arguemnets....that's what makes debates &
      viewpoints so fun!

      • 3 Replies to lettertotheeditor
      • see Post #3833, I rest my case as capital spending will be slashed and the stores will start to look like Ward's

        They are both in the same boat.

      • As the stock sinks below $40 (as I write) to a 52
        week low, I think you missed some of what I was trying
        to convey probably due to my poor communication
        style.

        GE owned a majority of Wards (and all of the credit
        card portfolio) since the LBO in 1988, Wards (Brennan)
        was dumb enough to enter into an agreement (see the
        10k's) with GE that they absorbed credit losses up to a
        point, Wards assumed all above that. GE figured out the
        aceptable loss rate and told Wards to give to the customers
        all they want (via in store credit) and we will give
        them a card. Wards thus let loose a torrent of bad
        credit risks to goose sales, just like S, and ate the
        losses. S will do this again and I question if their loss
        reserves are adequate. Credit is like heroin to S, they
        crave it.

        As for the knaves, a lot of the posts
        deal with forcing associates to sell ad ons, vs.
        taking care of csutomer service, My point is that this
        is a turn off period. Are store managers incented
        directly for add ons? I think this is the
        case.

        Regarding bloat, smart companies (and governments) don't
        add staff unless they add value. S didn't. I agree
        with your observations on process change, it will
        never happen at S thus my comment as this is the first
        of many mass layoffs to come just like Wards. They
        can call Wards for guidance on how to sell the
        corporate buildings too!!!

        Regarding capital, you
        missed my point. They have been investing in stores with
        NO RETURN! Now they will cut back capital worsening
        the situation. Also a lot of capital has been for the
        new corporate building out in Hoffman (Bloatsville),
        specialty store concepts like Home, that is a total bust
        and basic infrastructure. Anyone can build buildings,
        you gotta have a return.

        Regarding
        advertising, I heard that before, "Let's advertise more to
        drive sales" this means markdowns are coming, folks,
        big time. Advertising has a diminishing return and
        they are past that level to drive incremental
        sales.

        I also agree it is fun to debate and welcome your
        professional demeanor and courtesy. What other companies do
        you follow??

        Regards, Mental

      • I am a big Sears proponent but I agree that a
        serious change is needed.

        Martinez has lost the
        edge that he had when he came in with his 100 day plan
        and the closure of unprofitables etc.

        Support
        is needed at the store level- those in home office
        should be forced to change the culture by spending more
        time working at store level each year.

        As in
        the late 80'2 early 90's the store support have lost
        the sight of the impact of small decisions at the
        customer level.

        Ever been to an IKEA, Crate and
        Barrell or Target? What do they all have in common?=
        minimum out of stocks and the perception of customer
        service. Go into a Sears and out of stocks are plentiful-
        and while more sales people roam- the perception is
        that they do not.

        I believe that Martinez does
        have another re-invention up his sleave. If he does
        not then the board should demand someone who does

 
S
7.77+0.09(+1.17%)Jul 24 4:00 PMEDT

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