Sears Layoffs, Losses, and the Kardashian Kollection
Sears's 2Q results are in, and they're brutal: much worse than analysts expected. The company's attempts to improve the bottom line—closing 29 stores, laying off 250—didn't get to the root of the problem for one analyst:
Credit Suisse retail analyst Gary Balter said in a research note after the earnings were posted: "Essentially, the message from consumers to Sears is: 'We will shop there, but not at the prices you wish to charge as we won't pay full price for substandard service and unwelcoming physical facilities.'"
One bright, or at least less dim spot, was the hiring of a new chief marketing officer:
"She's a hotter property than the recent CEO hire (Lou D'Ambrosio)," Swinand said of Woo. "So it's mildly encouraging that she's joined."
Sears Holdings has had trouble hiring executives since Lampert is seen as being difficult to work with and does not want to pay too much, Swinand said.
What are they pushing for the future?
Rather than invest in its stores, Sears Holdings has been focused on improving its online presence and creating brands, such as the Kardashian Kollection.
Online and the Kardashian Kollection intersect on this inexplicably laid-out page, which features oddly-framed thumbnails of the clothing, and if you figure out to roll over them, zoomable images—but no good, big full-length shots. And the clothes... well, "The Kardashian Kollection reminds me of Peggy Bundy" is the most precise review I've read. Come to think of it, it is pretty eerie:
Oddly enough that little blast of declined-Americana past makes me think that, for all the corporate turnover and economic turmoil, perhaps Sears's biggest problem is the death of the middle class:
If you live and work in the professional communities of Boston or Seattle or Washington, D.C., it is easy to forget that nationwide, even among people ages 25 to 34, college graduates make up only about 30 percent of the population. And it is easy to forget that a family income of $113,000 in 2009 would have put you in the 80th income percentile nationally. The true center of American society has always been its nonprofessionals—high-school graduates who didn’t go on to get a bachelor’s degree make up 58 percent of the adult population. And as manufacturing jobs and semiskilled office positions disappear, much of this vast, nonprofessional middle class is drifting downward.
When I was growing up, Sears was the one-stop shopping experience for the middle class: home appliances, tools, linens, and respectable suburban clothing, everything you needed to enter your respectable, long-term job, home-ownership years. As that class disappears along with its trappings—Dickies, Lee, Dockers, all products I own, and in one case am wearing as I write this—Sears is getting pinched by cheaper options like Wal-Mart on one side, and similar but more aspirational retailers like Target on the other.
Esquire's Ken Kurson laments the store's decline:
Sears Holdings is a bad team. It is a fatally wounded company whose stock — though still trading in the middle of its 52-week range — will not recover, and, as a result, this year is likely to spell the end to two great American institutions. This isn't Blockbuster or Borders going out of business, as jarring as those collapses have been. We're talking about Sears and Kmart — two stores that have defined what it means to be an American for more than 100 years each. And the shame of it is that the Oz behind the curtain, legendary investor Eddie Lampert, never really seemed to care.
One complaint I keep hearing is that Sears doesn't really have an identity any more, and signing up famous-for-being-famous reality stars reflects a desperate search for it. But maybe it's not Sears that lost it's identity—maybe it's those of us who use to be in its target audience.
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SEARS SHOULD FOLD UP AND GO QUIETLY INTO THE SUNSET.
THIS SUMMER I WAS TALKING TO MY FRIENDS AT THE POOL.
NONE OF THEM SHOP AT SEARS HERE IN THE D.C. AND ARLINGTON, VA AREA
OK GIVE UP AND JUST ROLL OVER DEAD.
Sears has a unique advantage that nobody seems to think about. Thanks to the 90-million member Shop Your Way Rewards affinity program, Sears knows more about its customers than all of its competitors combined.
Data is not just a tool to understand customer buying habits. It is also a product. The makers of the products sold at Sears could buy from Sears the demographic information about who is buying their products, and what complementary products they buy, and the demographics of their competitors products, and the complementary products purchased.
This has to help Sears going forward. They can optimize inventory and marketing to local demographics. They can negotiate better deals from vendors because they have more to offer in return. And Sears can improve the customer shopping and buying experience.
Its contradictory to say Lampert is hard to work with and doesn't care. Warren Buffett didn't get rich because of value investing. The guys who wrote the book on value investing, Graham & Dodd, didn't get rich. Buffett and Lampert are more like Harold Geneen, demanding results from their managers. In an era when the average length of time someone holds a share of stock is seven months and corporate management answers to no one in particular, companies where the shareholders hold management accountable achieve greater success over time.
I wouldn't count out a company that has survived the Great Depression and numerous recessions.
I'd neverrrrrrrrrrrrrrrrrrrrrrrrrrrrrr everrrrrrrrrrr buy another thing from sears as they sold me a 3,000.00$ grill and it says lifetime warranty and they wouldn't go good for it and my stainless steel grill is now a big pile of rust outside by my pool !! Of anyone would like to talk to me about this feel free to contact me @ 352-812-2514 or 352-237-9665 thanks !!! My name is Chris Gilbert !! ;0)
Sears is worseeeeeeeeeeeeeeeeeeeeeeeee costumer service ive everrrrrr experienced in my life!!! I bought what's suppose be "100%" stainless steel grill and wasn't and warranty says "sears has a option to fix or replace" parts that's rusted out !! This grill in dangerous to use as open flames falls right onto the propane tank under the grease tray that's completely rusted out !!! I've been put through hell and back over this and sears hides behind their emails, and phone numbers that they NEVER return either !!! They've hang up on me and dont bother calking the CEO's office in Hoffman ILL. as it will just be transferred back to the "Texas office" & or outsourced to someone who can't even speak English !! Mr CEO of sears I can not waitttttttt till your company is gone which should be very soon!! Last year alone sears lost 55% plus on their stock values and soon theyll be penny stocks !!! Treat your customers bad on warranty issues and that will be the demise of this company!! Have a problem with something you've bought at Targets or Wallmarts and take it back with noooooooo problems!!!! I'll be loading my rusted POS grill that I bought from sears for 4800.$$ plus and putting it in my new duramax diesel truck and sitting in parking lot with signs on grill that says this was bought at sears and look at it now!!!!! Also one might would want to know that when you see the dog tag name "kenmore elite" on your products it's nottttttttttt made by kenmore!! It's just a superglued dog tag name and behind the scenes it's made in Tiwan!!! Like my rusted POS grill is made by "grand hall" !!!! If any questions arrise please feel free to contact me at 352-237-9665 and my name is Chris Gilbert!! Neverrrrrrrrrrrrrrr will I purchase another product from sears again!! I have a credit card that's unlimited with sears for my business and just today I cut up all my sears credit cards!! Id rather have 26 root canals at same time with no pain medicine than purchase another product from sears or even Kmarts!!! Sears you bettttttter get a grip on how you treat your customers ASAP as this is where your company is bleeding severly !!! I should know as I myself own my own companies for 30 plus years and have a master in business !! I'll have a party at my ranch house when sears goes under!!!