With Sears on death’s doorstep for good this time, this may be my final written piece on the former iconic retailer. And I am OK with that, really. It’s time to move on, for both me and Sears.
My coverage on the demise of Sears began more than 10 years ago as a retail stock analyst. I can vividly recall analyzing terrible quarters from Sears and providing insight — from a flip phone on the floor of a busy New York City Penn Station — to one of the best retail reporters in the game, Anne D'Innocenzio at the Associated Press. Anne and I would simply marvel at the eye-popping sales declines at Sears and Kmart and the subsequent mind-blowing losses. We wondered why billionaire hedge fund manager turned Sears CEO Eddie Lampert refused to invest in the stores.
The stores looked dreadful during a period of massive investment by rival chains Walmart, Target and Macy’s. In effect, Lampert was saying he didn’t want to be part of the future of retail. At the same time, he was pumping a new “membership” program that was sucking profits from Sears’s bottom line. Lampert never seemed to realize that Amazon and Costco make people pay to be members in order to offset the costs of doling out rewards to loyal shoppers.
Sears’s awful quarters and a series of sweetheart real estate deals by Lampert to keep the chain afloat led me to visit scores of locations to see what was truly going on. Snapping photos of derelict Sears and Kmart stores became an obsession. I would study these photos in my living room and think: “I am watching one of the greatest retailers ever go out of business in real time.” Broken cash registers. Busted refrigerators that held milk at Kmart. Dents in new furniture and appliances. All of this became the norm at Sears as employee morale vanished and operating systems broke down.
I got asked to leave several Sears locations, presumably because corporate alerted stores that I was there taking photos.
By October 2013, The New York Times plastered my Sears photos in a cover story. By January 2014, the very talented Robin Farzad coined me a “guerilla stock analyst” in a Bloomberg profile for snapping depressing Sears pics. That story triggered a Twitter attack on my work by former Sears Communications Chief Chris Brathwaite. Brathwaite jumped the burning Sears ship in October 2018 (around the time of the bankruptcy filing) for Tenneco Inc. He still has me blocked on Twitter, as does current Sears Communications Chief Howard Riefs.
Sorry state of Sears
Since then, I have entered the field of journalism and my childhood Sears and Kmart locations have shuttered. While the name plate in my cubicle has changed, the one thing that hasn’t is the sorry state of Sears. Cash has continued to be burned at mind-bending speeds. Sales have continued to plunge. Executives have continued to leave. Stores have continued to close in droves while competitors have finally started to thrive after years of investments in mobile shopping and logistics.
Sears entered bankruptcy in early October. Here at Yahoo Finance we pounded out numerous stories on the demise and reported it live to viewers on our new, fast-growing live-streamed news network. But I knew in October what I knew 10 years ago: Sears will cease to exist.
Sears has not proven that it has a place in the future of retail. It has not proven it has a viable business model. Suppliers have zero confidence in the company. Mall owners are salivating at renting out former Sears sites at much higher rates to traffic driving retailers such as Costco. The only thing that has been proven is that Sears is a cash-burning beast that tries to sell exercise equipment on 10% of a second-floor brick-and-mortar store.
That’s not going to work in this day and age.
Final bids for Sears assets were due Friday. Lampert squeaked in under the 4:00 p.m. deadline with a $4.4 billion offer for 425 stores. The structure of his proposal to save Sears is cash light ($1.3 billion) and rather absurd. Meanwhile, there has reportedly been little interest from other suitors for the assets besides liquidators. In all likelihood Dec. 28 will mark the official death of Sears. Liquidators are likely to have the upper hand versus Lampert in an auction process slated for Jan. 14.
Lampert will go down as one of the worst CEOs of a public company in history. Thousands of employees will lose their jobs. And Sears will be relegated to nothing more than a Wikipedia page that chronicles its rise and fall in America. Sad, but inevitable if you have tracked the company as I have for a decade.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter