January 2, 2026
wolterke/Depositphotos.com
Where Did Edward Lampert Go Wrong with Sears?
A New York Times article, “Why Sears’s Last Great Hope Was a Promise That Never Materialized,” explores whether Edward Lampert’s failure to revive Sears was due to the hedge fund manager’s missteps or “bad timing” as the legendary retailer has shrunk to only five U.S. locations.
In 2005, Lampert orchestrated one of the biggest retail mergers in history by using Kmart, which he acquired in bankruptcy in 2003, to buy Sears. The merger created the third-largest retailer in the country in a bid to better compete against Walmart. At the time, Sears owned most of its over 3,400 Sears and Kmart locations, and shares were bid up in hopes of capitalizing on the real estate.
By 2007, sales started sliding and losses arrived. To raise cash, Lampert began selling off divisions, including Lands’ End in 2014. Sears also invested in e-commerce, omnichannel and a “Shop Your Way” rewards program to fare better against Amazon, but critics claimed stores were neglected.
Critics have also charged that Lampert’s conflicts of interest undermined Sears’ turnaround efforts, including his fund collecting hundreds of millions of dollars in interest and fees from Sears, and taking stakes in businesses spun off from Sears.
In 2015, Lampert helped form Seritage Growth Properties, a publicly traded real estate company, with a vision of selling Sears’ valuable properties across the U.S. to more profitable retailers — or converting the spaces into mixed-use developments, whether movie theaters, condominiums or offices.
However, the NYT noted that the success of Seritage was foiled by a string of retail bankruptcies in ensuing years that slashed the prices of retail leases and properties. Seritage also leased the Sears stores it acquired back to Sears, with the rent received expected to fund redevelopment projects. However, Sears’ continued struggles led many of those acquired stores to close.
“Seritage was in a very tough spot — you have all your income tied to dying retailers,” Vince Tibone, a managing director at Green Street, a commercial real estate research and consulting firm, told the New York Times. “They just couldn’t replace the lost income from Sears fast enough.”
Sears’ Decline Often Laid at the Feet of Lampert: Is This Fair To Say?
In 2018, Sears filed for bankruptcy with about 700 stores remaining. The retailer has steadily closed locations in the ensuing years.
Many of the nearly 1,100 comments attached to the article referenced private equity’s reputation. One read, “Anyone with any smarts knew years ago that Lampert was destroying Sears for his own, personal, financial gain.”
One response called out Lampert’s infatuation with philosopher and writer Ayn Rand, claiming a relationship with this philosophy that resulted in Sears’ departments competing against each other.
However, some noted that Sears was struggling long before Lampert arrived, including failing to adjust to the price competition of Walmart and its slow adoption of online selling. One believed the “The Softer Side of Sears” push in the 1990s diluted the retailer’s hardlines strength. A few comments reached back to the impact of antitrust and competition laws in the first half of the twentieth century, which created obstacles for A&P as well.
Many also shared their fond memories of Sears, calling out the durability of Sears’ tools and appliances as well as the famed catalog. One said, “Sears had a continental presence, incredible distribution network, a catalogue we read like a bible of shopping, etc, etc. How they did not simply put that catalogue online and lock in that dominance is still a mystery and a tragedy.”
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Discussion Questions
Do you hold Edward Lampert largely responsible for Sears’ descent over the last 20 years, or was Sears largely unsalvageable when he took over?
What factors played the largest role in impeding Sears’ revival?
Poll
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Eddie Lempert should have let Sears be Sears, a versatile retailer who could sell just about everything. Once Sears became Mr. Lempert’s cash cow, it was over.
Correct!
That was PR, “a bid to better compete against Walmart.” There was never any investment. I’m sure many corporate raiders think he did right. Now we saw how it play out with Hudson Bay and soon Saks. There ought to be enforceable laws against such piracy. Hundreds of thousands of lives are impacted by such greed and destruction.
To paraphrase Stalin: steal a few thousand and it’s a felony, steal a few billion and it’s “finance”.
I don’t think Edward Lampert alone bears the lion’s share of responsibility for Sears’ descent — he was the last steward in a long chain of leadership decisions that cumulatively eroded the company’s relevance. By the time Lampert assumed effective control in the mid-2000s, Sears had already experienced decades of strategic drift. The iconic retailer had shed the innovation that once made it dominant — from discontinuing its pioneering catalog just as digital commerce was emerging in the early 1990s, to under-investing in store experience and merchandising while competitors like Walmart, Target, and later Amazon aggressively reshaped consumer expectations. Those early missteps set up a brand and operating model that was already on life support long before Lampert’s era began.
That said, Lampert’s tenure did accelerate Sears’ downward trajectory by doubling down on financial engineering at the expense of retail investment and customer relevance. His strategy leaned heavily on monetizing assets — spinning off real estate into Seritage, for example — and cutting costs rather than reinvesting in digital transformation, store experience, and differentiated value propositions that today’s consumers demanded. These choices compounded the structural weaknesses that prior leadership had allowed to fester, leaving Sears unable to compete effectively in omnichannel retail or to offer compelling reasons for customers to choose Sears over more nimble rivals.
In the end, the largest factors impeding Sears’ revival were longstanding cultural and strategic failures that spanned multiple decades: an inability to anticipate and adapt to changing consumer behavior, a slow response to the rise of e-commerce, a failure to modernize stores and private brands, and repeated leadership approaches that treated retail as a series of balance-sheet fixes rather than as a customer-centric business. Lampert’s era may have been the most visible chapter of decline, but the roots of Sears’ undoing stretch back to a series of critical turning points well before his time — underscoring that retail success requires constant evolution, investment, and a relentless focus on the shopper.
Come on now: given that we’re limited to 500 characters here, the only way to get a proper response is to ask “where did he go right?” (Seven letters may suffice: N-O-W-H-E-R-E) Sears, of course had may problems before Lampert arrived – that’s no small part of why he ended up with it – but he had no retail experience…and it showed; then again, many will argue, retail experience was irrelevant as it was never a sincere effort at selling, but a real estate ploy. We can only hope he fared as poorly thru it as everyone else.
ESL did alot right. He hired brilliant people in Marketing, Merchandising, eCommerce and CRM/Loyalty. He did not want to sink a $1 into the physical store. It was all about eCommerce and credit card Marketing in partnership with CITI.
Eddie didn’t make mistakes, He got exactly what he wanted. Cheap real estate that he could use a currency for Seritage. For example, there was a Kmart near me which has been repurposed into a Ross, Burlington, Michels and Dots. He cleaned up. The Sears in Aventura mall was demolished and turned into specialty shops and a High end food mall.
Eddie did exactly what all vultures do. As for, “what happened to Sears?”a lot of its business model became irrelevant because everything is so much smaller now. Like RadioShack. We looked at a full page ROP ad and every single thing on it is now in your phone. Everything. So it became space looking for a purpose. That’s backwards.
Countless articles have been written about how Lampert used sophisticated financial tools to profit individually while the brand stayed mired in irrelevance. There was little money invested in the brand but he found ways to pay himself through Hedge Fund Fees ($2 Billion), $350M in rent back to Seritage, and $400M interest to his Hedge Fund ESL on the very assets he owned. There’s more but you get the point. Sears may have died without Eddie Lampert but he never gave it a fighting chance. He’s a scumbag, albeit a very rich scumbag.
Sears stores were in the dead end of the mall. When built it was the anchor. As the mall expanded and Macy’s, Nordstrom and JCP entered traffic faltered. Kmart was there for the underserved class of customers. It was viable, just lost its way vs Walmart, Target and Dollar Stores. ESL was 100% responsible for NOT investing in the physical store and instead wanted to compete with Bezos/AMZ as online as well as mobile was alot more flexible and responsive than physical stores. Auto held their own as did Optical and Hardware. I lead and helped evolve Shop Your Way Rewards which ESL very much supported in order to identify and understand customers across 4100 stores plus online. 150MM+ active members could have sustained the brand but lack of physical store innovation and constant distractions didn’t help.
There are really two questions here: Did Fast Eddie do right by Sears…or did he do the right thing for Fast Eddie. The answer to the first question is undeniably no. He never ran this company with the intent of making it a better retailer. It wasn’t so much wrong directions as it was no directions. There were no meaningful attempts to adapt to the changing realities of the retail business in terms of merchandising in-store vs. online and focusing each of the two brands on what each did best. There were so many missed opportunities and it clearly didn’t have to end this way. As to the second question, the answer is absolutely positively yes. It would take a better financial journalist then me to figure out how much money Lampert took out of the company and put into his own pockets. Don’t believe the sob stories of how he lost so much. By my reckoning they just aren’t true. There are two reasons he lives on a private island in Florida: one, to stay safe from the hundreds of thousands of people who lost their jobs and their accounts payable because of the way he ran things. The second reason: he can well afford it.
Was Sears on a declining trends when Eddie Lampert took over? Yes. Could Sears have staged a comeback if someone other than Eddie had taken over? Possibly. But we’ll never know, because “Fast Eddie” as many christened him due to to all the clever financial engineering moves he made to extract as many dollars out of Sears that he could use other line his own pockets, never offered a genuine chance to reviving Sears. Nothing was invested in stores. Real Estate was sold off and none of those dollars found their way back to store investments. Were there any investments? Sure, some in e-commerce, loyalty, but the fact is, all of that is meaningless for a retailer if they can’t service fundamentals for customers. And Sears simply lost relevance. Those storied brands, like Craftsman and Kenmore, no longer had real innovation. Consumers lost interest. Could all of those issues have been overcome? Possibly, if someone with actual retail experience had been at the helm. We’ll never know, because Fast Eddie never had any intention of doing so – those few investments were largely smoke and mirrors to cover the other financial maneuvering. This was always about “extracting value” from existing assets and never about restoring retail brand dominance.
The first time the RetailWire discussion was about Lampert and Sears (ah, so long ago). I wrote that it was not a retail play and that Lampert had no interest in reviving Sears.
This was a PE/Real Estate play from day one. More than classic. It was beautifully executed. Eddy Lampert did not fail; he won. He had an objective. He invested. And, it was successful. It was textbook Private Equity Strategy.
I will give him credit. He strung it out a whole lot longer than I would have ever guessed.
Maybe, just maybe, Lampert was 100% correct from day one. Sears as a mall anchor department store retailer was not ever going to be salvagable. So, let the dismantling begin. He observed the efforts that had been made to date, and did the math. And pounced. And I’m guessing the math has worked quite well for him. Which is not to say it couldn’t have been otherwise, but the degree of metamorphasis that Sears would have required to survive might not have ever been able to attract the patient capital it would have required. And it would have required a level of revolutionary evolution that simply did not exist in department store thinking at the time
Tack on groceries, change the value equation, and you’ve got a competitor to Walmart and Target. Spin off appliances and electronics and don’t let Best Buy become the dominant player. Spin off a smaller (much smaller) footprint and don’t let Tractor Supply grow to be a power house. Spin off auto repair and tires and……………..
Sears was truly one of the most trusted brands in America. In 1969 they were the largest retailer in the world. But there was a complacency deeply rooted in late 20th century retailing that lots of retailers are still trying to shake loose from. Sears will always be one of the most interesting “what if” stories in retail.
The crux of the problem is that, under Lampert, Sears was never run as a retailer. It was run as an ongoing liquidation with various part of the business being monetized for short-term gain. As Sears was huge, this process went on for years until the business collapsed in on itself. There is, of course, an argument to be made that Sears was beyond saving and that monetization was the most prudent course of action. Even so, the whole thing left a bitter taste and a trail of destruction.
Eddie Lampert attempted to bolster Sears online with its meager resources, but that was never going to be enough to have a legitimate chance to compete with Walmart and Target. Customers view a complete retail brand experience as both physical stores and online. You can’t have outdated and poorly merchandised stores with an online presence promising and looking like something different.
It should have been Lamperts priority to get ample resources and plan to invest in both. But being a hedge fund manager with no retail or brand experience, it was doomed as a financial play from the start.
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Eddie Lempert should have let Sears be Sears, a versatile retailer who could sell just about everything. Once Sears became Mr. Lempert’s cash cow, it was over.
Correct!
That was PR, “a bid to better compete against Walmart.” There was never any investment. I’m sure many corporate raiders think he did right. Now we saw how it play out with Hudson Bay and soon Saks. There ought to be enforceable laws against such piracy. Hundreds of thousands of lives are impacted by such greed and destruction.
To paraphrase Stalin: steal a few thousand and it’s a felony, steal a few billion and it’s “finance”.
I don’t think Edward Lampert alone bears the lion’s share of responsibility for Sears’ descent — he was the last steward in a long chain of leadership decisions that cumulatively eroded the company’s relevance. By the time Lampert assumed effective control in the mid-2000s, Sears had already experienced decades of strategic drift. The iconic retailer had shed the innovation that once made it dominant — from discontinuing its pioneering catalog just as digital commerce was emerging in the early 1990s, to under-investing in store experience and merchandising while competitors like Walmart, Target, and later Amazon aggressively reshaped consumer expectations. Those early missteps set up a brand and operating model that was already on life support long before Lampert’s era began.
That said, Lampert’s tenure did accelerate Sears’ downward trajectory by doubling down on financial engineering at the expense of retail investment and customer relevance. His strategy leaned heavily on monetizing assets — spinning off real estate into Seritage, for example — and cutting costs rather than reinvesting in digital transformation, store experience, and differentiated value propositions that today’s consumers demanded. These choices compounded the structural weaknesses that prior leadership had allowed to fester, leaving Sears unable to compete effectively in omnichannel retail or to offer compelling reasons for customers to choose Sears over more nimble rivals.
In the end, the largest factors impeding Sears’ revival were longstanding cultural and strategic failures that spanned multiple decades: an inability to anticipate and adapt to changing consumer behavior, a slow response to the rise of e-commerce, a failure to modernize stores and private brands, and repeated leadership approaches that treated retail as a series of balance-sheet fixes rather than as a customer-centric business. Lampert’s era may have been the most visible chapter of decline, but the roots of Sears’ undoing stretch back to a series of critical turning points well before his time — underscoring that retail success requires constant evolution, investment, and a relentless focus on the shopper.
Come on now: given that we’re limited to 500 characters here, the only way to get a proper response is to ask “where did he go right?” (Seven letters may suffice: N-O-W-H-E-R-E) Sears, of course had may problems before Lampert arrived – that’s no small part of why he ended up with it – but he had no retail experience…and it showed; then again, many will argue, retail experience was irrelevant as it was never a sincere effort at selling, but a real estate ploy. We can only hope he fared as poorly thru it as everyone else.
ESL did alot right. He hired brilliant people in Marketing, Merchandising, eCommerce and CRM/Loyalty. He did not want to sink a $1 into the physical store. It was all about eCommerce and credit card Marketing in partnership with CITI.
Eddie didn’t make mistakes, He got exactly what he wanted. Cheap real estate that he could use a currency for Seritage. For example, there was a Kmart near me which has been repurposed into a Ross, Burlington, Michels and Dots. He cleaned up. The Sears in Aventura mall was demolished and turned into specialty shops and a High end food mall.
Eddie did exactly what all vultures do. As for, “what happened to Sears?”a lot of its business model became irrelevant because everything is so much smaller now. Like RadioShack. We looked at a full page ROP ad and every single thing on it is now in your phone. Everything. So it became space looking for a purpose. That’s backwards.
Countless articles have been written about how Lampert used sophisticated financial tools to profit individually while the brand stayed mired in irrelevance. There was little money invested in the brand but he found ways to pay himself through Hedge Fund Fees ($2 Billion), $350M in rent back to Seritage, and $400M interest to his Hedge Fund ESL on the very assets he owned. There’s more but you get the point. Sears may have died without Eddie Lampert but he never gave it a fighting chance. He’s a scumbag, albeit a very rich scumbag.
Sears stores were in the dead end of the mall. When built it was the anchor. As the mall expanded and Macy’s, Nordstrom and JCP entered traffic faltered. Kmart was there for the underserved class of customers. It was viable, just lost its way vs Walmart, Target and Dollar Stores. ESL was 100% responsible for NOT investing in the physical store and instead wanted to compete with Bezos/AMZ as online as well as mobile was alot more flexible and responsive than physical stores. Auto held their own as did Optical and Hardware. I lead and helped evolve Shop Your Way Rewards which ESL very much supported in order to identify and understand customers across 4100 stores plus online. 150MM+ active members could have sustained the brand but lack of physical store innovation and constant distractions didn’t help.
There are really two questions here: Did Fast Eddie do right by Sears…or did he do the right thing for Fast Eddie. The answer to the first question is undeniably no. He never ran this company with the intent of making it a better retailer. It wasn’t so much wrong directions as it was no directions. There were no meaningful attempts to adapt to the changing realities of the retail business in terms of merchandising in-store vs. online and focusing each of the two brands on what each did best. There were so many missed opportunities and it clearly didn’t have to end this way. As to the second question, the answer is absolutely positively yes. It would take a better financial journalist then me to figure out how much money Lampert took out of the company and put into his own pockets. Don’t believe the sob stories of how he lost so much. By my reckoning they just aren’t true. There are two reasons he lives on a private island in Florida: one, to stay safe from the hundreds of thousands of people who lost their jobs and their accounts payable because of the way he ran things. The second reason: he can well afford it.
Was Sears on a declining trends when Eddie Lampert took over? Yes. Could Sears have staged a comeback if someone other than Eddie had taken over? Possibly. But we’ll never know, because “Fast Eddie” as many christened him due to to all the clever financial engineering moves he made to extract as many dollars out of Sears that he could use other line his own pockets, never offered a genuine chance to reviving Sears. Nothing was invested in stores. Real Estate was sold off and none of those dollars found their way back to store investments. Were there any investments? Sure, some in e-commerce, loyalty, but the fact is, all of that is meaningless for a retailer if they can’t service fundamentals for customers. And Sears simply lost relevance. Those storied brands, like Craftsman and Kenmore, no longer had real innovation. Consumers lost interest. Could all of those issues have been overcome? Possibly, if someone with actual retail experience had been at the helm. We’ll never know, because Fast Eddie never had any intention of doing so – those few investments were largely smoke and mirrors to cover the other financial maneuvering. This was always about “extracting value” from existing assets and never about restoring retail brand dominance.
The first time the RetailWire discussion was about Lampert and Sears (ah, so long ago). I wrote that it was not a retail play and that Lampert had no interest in reviving Sears.
This was a PE/Real Estate play from day one. More than classic. It was beautifully executed. Eddy Lampert did not fail; he won. He had an objective. He invested. And, it was successful. It was textbook Private Equity Strategy.
I will give him credit. He strung it out a whole lot longer than I would have ever guessed.
Maybe, just maybe, Lampert was 100% correct from day one. Sears as a mall anchor department store retailer was not ever going to be salvagable. So, let the dismantling begin. He observed the efforts that had been made to date, and did the math. And pounced. And I’m guessing the math has worked quite well for him. Which is not to say it couldn’t have been otherwise, but the degree of metamorphasis that Sears would have required to survive might not have ever been able to attract the patient capital it would have required. And it would have required a level of revolutionary evolution that simply did not exist in department store thinking at the time
Tack on groceries, change the value equation, and you’ve got a competitor to Walmart and Target. Spin off appliances and electronics and don’t let Best Buy become the dominant player. Spin off a smaller (much smaller) footprint and don’t let Tractor Supply grow to be a power house. Spin off auto repair and tires and……………..
Sears was truly one of the most trusted brands in America. In 1969 they were the largest retailer in the world. But there was a complacency deeply rooted in late 20th century retailing that lots of retailers are still trying to shake loose from. Sears will always be one of the most interesting “what if” stories in retail.
The crux of the problem is that, under Lampert, Sears was never run as a retailer. It was run as an ongoing liquidation with various part of the business being monetized for short-term gain. As Sears was huge, this process went on for years until the business collapsed in on itself. There is, of course, an argument to be made that Sears was beyond saving and that monetization was the most prudent course of action. Even so, the whole thing left a bitter taste and a trail of destruction.
Eddie Lampert attempted to bolster Sears online with its meager resources, but that was never going to be enough to have a legitimate chance to compete with Walmart and Target. Customers view a complete retail brand experience as both physical stores and online. You can’t have outdated and poorly merchandised stores with an online presence promising and looking like something different.
It should have been Lamperts priority to get ample resources and plan to invest in both. But being a hedge fund manager with no retail or brand experience, it was doomed as a financial play from the start.