Shed a tear for Sears Holdings if you must. Despite any flicker of post-Chapter 11 hope Eddie Lampert tries to peddle, all that seems left of this story— even if in some way the Sears and Kmart brands are salvaged or reincarnated— is for the plug to be pulled on what is left of the business as we know it and the remnants of its assets to be redistributed.
Historic Case Study
Yes, it’s sad— an historic case study in everything one can do to deconstruct an American institution on an astounding scale. But there is no do-over for Lampert, for every decision that neglected the stores while he cut to the front of the creditors line and now looks to steer post-bankruptcy debt and assets his way.
There is no “what if.” As in what if visionary, shrewd financial and retail management had given two of the most venerable, if then-vulnerable, retailing icons a fighting chance at the onset of the marketplace’s digitally inspired transformation?
Yes, it’s tragic that there are real casualties— businesses, employees and more— that have been stranded in the wake of Sears’ downfall.
So, shed a tear. But don’t act surprised. Responsible Sears/Kmart suppliers and lenders saw this coming for years and took measures to limit risk even as Lampert found new ways to delay the inevitable.
Retailers, from the small to the super-sized, have forever succumbed to mismanagement, lax competitiveness, bad fortune and obsolescence. That legendary giants such as Sears or Toys ‘R Us could be purged from today’s volatile retail landscape should be no more startling than the withdrawals of such past market leaders as Montgomery Ward, Service Merchandise and Lechters. Remember them?
Meanwhile, every sentimental tear shed for Sears can be a drop of new opportunity for others.
The past several months have revealed several recharged retailers not named Amazon that are well positioned to capture former Sears and Kmart customers. Kohl’s. Walmart. Target. TJX. Burlington. Ross. Costco. Home Depot. Lowe’s. Best Buy. Who knows? Maybe this is the opening needed by critically troubled J.C. Penney under the new stewardship of an accomplished merchant in Jill Soltau.
Revenue surrendered by exiting retailers rarely is redistributed in its entirety to other retailers. But a slightly lower, more stable revenue pool divided among healthier retailers should be a better long-term play for the housewares industry than the larger yet shrinking revenue base of a dying customer.
Someone, possibly Lampert, could bet on Sears and Kmart emerging from Chapter 11 as smaller, reinvented platforms capable of decent volume from leaner omnichannel formats. Liquidation of these once-dominant retail nameplates could be more likely.
Retailers and suppliers shouldn’t need yet another reminder that nothing in this business is too big to fail.
So go ahead, shed a tear for Sears Holdings. Then get back to work. That knock you hear isn’t a warning of more trouble. It’s opportunity.