DISCUSSION

Will the new plan for Sears work any better than the previous ones?

February 13, 2019Written by George Anderson

Photo: Getty Images

Creditors and others who have watched Sears Holdings have contended, some for years, that Eddie Lampert has engaged in a systematic dismantling of the company since he combined Kmart and Sears in 2004. There is evidence to support this assertion. Today, however, the company is once again in the hands of Mr. Lampert who won the right at bankruptcy auction to keep 223 Sears and 202 Kmart stores open. The big question is whether Mr. Lampert is intent on turning the retailer around, as he has promised for years, or if he will finish the job of dismantling what’s left of the two once-great chains, as his critics contend. Over the years, Mr. Lampert fired back at critics of his plan to turn around Sears, suggesting they simply didn’t get it. History has yet to prove that the “genius” of Mr. Lampert’s plan can be turned into positive results on the ground. But with the auction win now achieved, what’s the plan to keep the retailer going if not growing? Mr. Lampert, according to a Wall Street Journal report, plans to sell or sublease some of the remaining stores. While he will remain chairman of the still to be renamed company, he plans to hire a CEO to execute his vision, which includes opening smaller stores and reducing the chain’s dependence on apparel. That means Sears will be under even greater pressure to succeed with its appliance business, which faces growing competition from Best Buy, Home Depot, Lowe’s and others. J.C. Penney, one of Sears’ primary competitors, recently announced it is abandoning its appliance business to focus more on apparel and other soft goods. Craig Johnson, president of Customer Growth Partners, told the Journal that relying on appliances is “long shot” for Sears, but it does have an upside. “Most of the profits on appliances are made on the servicing side, and Sears still has a good service business,” he told the paper.

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