Meet the billionaire investor who led Sears into bankruptcy

[groundloop]

This discussion thread was locked as off-topic by JudyM (a host of the Latest Breaking News forum).

Source: CBS News

More than a decade ago, hedge fund manager Eddie Lampert touted his merger of Kmart and Sears by saying it would lay the groundwork for a grand revival of the struggling retailers. Sears, an iconic department store chain launched in the late 19th century, employed more than 200,000 workers, operated almost 900 stores and generated annual revenue of $31 billion.

Jump forward to 2018, and Lampert's plans have led Sears not to a turnaround, but straight into bankruptcy court. The store's headcount has been slashed to 90,000, less than half of what it was when Lampert bought Sears in 2004 and combined it with Kmart. Sears's annual revenue has dwindled to $16.7 billion after store closures and shopper defections to rivals such as Target and Walmart. The company has also spun off or sold some its major brands, including Land's End and Craftsman.

<snip>

"Today is a day that will live in retail infamy," said Neil Saunders, the managing director of GlobalData Retail, in a research note. "That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous in equal measure."

<snip>

Lampert, a devotee of the novelist Ayn Rand, reportedly made division heads compete for resources and money, believing that the competition would ignite innovation and sales. Instead, according to Bloomberg, the result was managerial infighting.

Read more: https://www.cbsnews.com/news/meet-the-billionaire-who-led-sears-into-bankruptcy/

[turbinetree]

1. And just think the pensioners are going to get screwed...........................this fuckers

mentality right along with that asshole Paul "ayn rand" Ryan..................another fucking libertarian, or a neoliberal asshole, take your pick........................

[Wellstone ruled]

2. My guess it Lampert

has already juiced the Pension Fund for all the Sears People. Have not seen or heard if he put the Pension Fund in the filing. Most likely filed with IOU's or Script. He has lost 11 billion since 2006.

[dixiegrrrrl]

27. One of the many vulture funds that have done this.

Exact behavior as the mob. take over a profit making business, borrow to the hilt on it, grab the pension fund, keep the profits, no re-investment, then slash expenses ( emnployees, repairs) to the bone, and finally put it in bankruptcy when "borrowed" money is due to be paid back.
Trump has done it repeatedly.
Infamous PGE in Cal. did it, by forming 2 companies, one where the profits went, one where the debts went. Some of that debt being all the lawsuits against it because of its role in the Enron fraud.

[Wellstone ruled]

28. Oh how I know.

Had three Employers do this during the Reagan years. Move the assets to a new Company and dump the liabilities into a BK. And in two of the BK's,they stole the Pension set a sides. In one we were able to attach the Survial Assets which prevented the Courts from stealing our Pensions. It took us ten years to the day of the BK filing to recoup our losses.

[rickyhall]

37. Isn't that Trump lost his casinos, more or less?

[CountAllVotes]

6. A friend of the family worked for Sears

He worked in automotive repairs and was a very good mechanic. He was employed by them from age 18 on!

This really sucks!

I hope they get SOMETHING, esp. after doing it for a job for 40+ years!!

[George II]

3. More than a decade ago the effect of Amazon and online shopping wasn't close to what it is today.

[keithbvadu2]

4. Financial dealing - to yourself - Sears, Kmart

Financial dealing – to yourself – Sears, Kmart

https://www.bloomberg.com/news/articles/2018-09-27/lampert-s-sears-plan-would-hand-lampert-s-hedge-fund-1-billion

CEO’s Plan to Save Sears Would Hand His Hedge Fund $1 Billion

Eddie Lampert’s hedge fund has a new plan for cutting Sears debt. The main beneficiary would be Eddie Lampert’s hedge fund.

Proposal calls for some creditors to get ‘worthless’ equity

“To have debt that’s convertible into equity when the equity is worthless doesn’t appear to be a very attractive proposal at all,’’
-------------
Some wordsmith should take pride in writing this::::

“We will now be working aggressively to execute liability management transactions so that we can extend our runway and continue executing on our transformation strategy,’’ Sears said in a Tuesday internal message to employees seen by Bloomberg. “At the same time, we’ll continue to move forward with our other planned liquidity and cost measures.’’

[Initech]

11. Reverse Robin Hoods.

Robin Hood robbed from the rich and gave to the poor. These guys rob from the poor and give it to themselves.

[iluvtennis]

5. Lampert reportedly made division heads compete for resources and money, believing the competition

...would ignite innovation and sales.

Idiot. This sounds like a Trump's modus operandi.

[Johnny2X2X]

7. 10 Years ago he could have done something

A decade ago it was obvious they would have to compete with Amazon like Walmart is now doing. Sears/K Mart had a lot of great infrastructure and property, they would have been in a good position to make a move. Instead they changed little and what you hd was a 10 year slow motion train crash.

[underpants]

31. Reminds me of Circuit City

It was headquartered here. There are actually a couple of people who still ork for Circuit City I learned recently.

My stepfather retired from Sears and when he heard that CC was dropping appliances he said, "they'll be gone in 10 years". CC also signed 30 year leases and got stuck in the old parts of town. Many bad decisions.

[TygrBright]

8. Oh, god, why... is he running for President? Will this nightmare never end...? n/t

[Initech]

9. Vulture capitalism claims another victim.

[KT2000]

10. how many times

are they going to try the "competition model" until they realize it does not work. Same thing happened at Microsoft - workers turn against each other and rather than get creative. They spend the time sabotaging other departments.

[weissmam]

12. Lampert

will live forever as the fool that killed Sears

[LiberalFighter]

13. I do hate hedge fund investors. Would love them suffer a horrible death.

[eppur_se_muova]

14. What, Ayn Rand isn't the best source of advice on running a business ? Who knew ?

I mean, besides anyone with a scintilla of common sense.

[SkyDaddy7]

25. The business having real success...

Didn’t really matter to this guy in the long run anyway...Which is why he could play his sick Ayn Rand games with department heads sit back & laugh & if all fails which he knew it would he is still positioned to make a killing! 😰🤢🤮🤮🤮

[7962]

15. Such a shame.They could have been Amazon

They already had the "wish book" that people ordered from for decades. The infrastructure to fulfill orders, etc. But they just didnt see it

[Kaleva]

24. It wouldn't been much of a leap to convert the catalogs to the internet.

[dixiegrrrrl]

32. Amazon is them, in today's world. n/t

[RVN VET71]

16. Pitting your best people against each other?

What a genius. Lampert has been consistently good at 2 things: 1)making gobs of money for himself and 2) screwing everyone who has the misfortune of working for him. Add to that, now, a third: the ability to take a retail giant and run it into the ground in the name of St. Ayn.

He's one of the reasons the USA is never going to be great. Our unelected President is another.

[PSPS]

17. Predictable when someone devoid of retailing experience assumes control of a retail chain.

It takes a shopkeeper's mindset to be successful at running a retail store/chain. The abysmal state of the stores, their inventory and their advertising is what doomed Sears, and this is because Lampert didn't know the first thing about retail.

[moondust]

18. Maybe being a hedge fund gambler, er "manager,"

doesn't necessarily qualify somebody to manage a large retail operation, a job that may require some actual know-how?

I suppose Eddie is another one of these:

Naomi Klein: Donald Trump, Brett Kavanaugh, and the Rule of Pampered Princelings

(sorry, it's at the Intercept)

[christx30]

23. Grim Reaper would also work I leiu of manager.

[barbtries]

19. watching these stores go saddens me

Sears, JCPenney, who's next?

[KWR65]

20. Sears didn;t compete

I found wrangler jeans for $25 at wal-mart and $50 at sears.

[FSogol]

21. The end result of liberatrian thinking.

[kchamberlin25]

22. I worked for Western Auto for a while

while it was owned by Sears. I was a tire/service salesperson. I could see the writing on the wall that they were going to go to an all parts store, closing the service departments. When I quit, I told my store manager that they were going to do this, and it would be a disaster. He said I was crazy.

I was not (my mom had me tested lol).

[Kaleva]

26. Sears needed someone who would have abondoned the brick and motar store model

early enough when Sears still had the cash reserves to do so.

[Turbineguy]

29. Economics based on fiction.

What could go wrong?

[paleotn]

30. When I first heard that Kmart was being paired with Sears...

I thought this will not end well. No retail business can long survive being hamstrung with that much debt, dragging around the dead, stinking rhinoceros carcass that is Kmart. When I saw shopping carts...freaking shopping carts!...in Sears I thought the end is near. That stupid ass idea did wonders for the brand. When I saw Craftsman tools being sold at Lowes I thought the end has finally come.

Lampert is the poster child for fact that attaining great wealth is more a matter of luck than skill. His management acumen resembles that of a stump, but I'm sure he thinks very highly of himself.

Oh, but he's got some really prime real estate. Should serve him well as brick and mortar continues its long, painful demise. More tumbleweed strip malls dotting the landscape.

In fairness, Sears started this long decent years ago, when they completely missed electronic commerce and killed the catalog. They were just waiting for some "genius" to step in and finish the process.

[dixiegrrrrl]

33. K-mart was fading fast 15 years ago.

Then Target moved into the same territory and it was clear what was gonna happen.
The K-marts got let dingier, less traffic, while Target was packed.

[JohnnyRingo]

34. I'll bet he's walking away with a fat profit for himself.

He'll pick that carcass clean.

[pansypoo53219]

35. AHA!!! WALL STREET. an "investor" killed a long dairy company in WI.

i miss golden guernsey. fuck wall street.

[PatrickforO]

36. In November 2014, we bought a Kenmore Elite refrigerator with bottom freezer.

I bought the full extended warranty and then extended that when it ran out, paying $50/mo.

It went out for a month in 2016 - a month while Sears goofed around passing the buck until my repeated calls finally worked and we got a tech.

Then it went out for about 10 days in 2017.

This year, it went out on September 18. I have five pages of documentation of the steps I've taken, call after call after call after call. I've missed about four days of work because a) no one at Sears cares about customers, b) everyone wants to pass the buck without taking any responsibility. I've journeyed from Sears to Cross Country Home Warranty Services, back to Sears.

Finally, Friday we had an 'authorized' Sears tech out. He was working on it for three hours then irreparably damaged the wire harness with his blowtorch.

So, is Sears going to give me a new refrigerator?

Well...no...my 'claim' has been forwarded to a company called Sedgewick Claims Management Services. Seriously.

Sedgewick has two days to review my 'claim' before an 'examiner' calls me. The 'examiner' in theory will determine who owes me the new refrigerator/freezer, but the guy I talked to today seemed to think that's all they'll do. When the 'examiner' makes his/her determination, then it is AGAIN on me to fight with the portion of the Sears mis-organization to get what is owed me.

In the meantime, Crazy Ayn Rand fanatic Eddie Lampert has been enriching himself by using his hedge fund to buy up Sears' assets piecemeal just like Carl Icahn did during the 80s.

Lampert belongs in prison. He's a sociopathic dirtbag who you wouldn't even allow in your house, and if he actually came in, you'd have to fumigate. Pieces of shit like Lampert need to be caged before they can hurt more people.

Bottom line: I STILL DON'T HAVE A REFRIGERATOR AFTER A MONTH, and Sears is conveniently declaring bankruptcy. If I'm lucky, I'll get a new fridge. But likely, I'll get nothing but Lambert's Ayn Rand shit and be out $2,100.

[JudyM]

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