Eddie Lampert

The Failure Of Sears, FJ Benjamin & The Future Of Retail

If one were to step foot into a Sears store today, one might find a truly sad state of affairs for the retailer, run by once former high flyer and billionaire, Eddie Lampert of ESL Investments.  Empty carparks, chaotic arrangement of goods that are in no demand and a sparse density of people will greet you as you walk in. And we wonder what the heck is going on? Afterall, this wunderkid, Eddie Lampert, used to have the midas touch. Whatever he touched used to turn to gold. Not so anymore!  And a company  spokesperson mentions that they are still in the midst of turning operations around. Is that a joke and who are they kidding? This is the chart of Sears Holdings from the year 2004. And it isn't a pretty picture for shareholders. The share price has been languishing from 2007. To find out what had been happening to Sears, let us examine some of the numbers reported by the company. Now revenues are the lifeblood of a retailer. Falling revenues mean serious trouble. This of course can be attributed in part to the  closure of retail outlets. And partly, Sears no longer carries the kind of products that its customers value. This has been exacerbated by the fact that retail is dying, largely due to the effects of ecommerce. I think Eddie didn't see that coming ten years ago. More on the effects on ecommerce later. (more…)