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The Wall Street Journal this morning reports that hedge funder Edward Lampert has plans for the new Sears Holdings, which he now has acquired out of bankruptcy for $5.2 billion - he wants to “sell or sublease some of the 425 remaining stores … plans to devote more of the retail space to tools and appliances … (and) also wants to open more smaller stores.”

And one other thing - he plans to remain the company’s chairman, despite the fact that since he bought into and took control of the company, its revenue, profits, market share and image have all continually suffered. Lampert will, however, look for a CEO to run the company on a day-to-day basis.

According to the Journal, “The restructured company, which doesn’t yet have a new corporate name, will be composed of 223 Sears stores and 202 Kmart locations, as well as the Kenmore and DieHard brands. Sears sold its Craftsman brand to Stanley Black & Decker in 2017 but retains a license to sell products under the name … The shrunken Sears will compete against bigger retailers such as Home Depot Inc., Lowe’s Co s., Best Buy Co. and Inc. After closing hundreds of stores in recent years, it will lack the economies of scale and negotiating clout with suppliers that the larger players wield.”

The Journal quotes the always reliable Burt Flickinger, managing director of consulting firm Strategic Resource Group and an MNB fave, as saying that these moves are coming a decade too late: “They have already been category-killed by the big box chains … They have lost the confidence of the vendor community. Sears and Kmart prices are no longer competitive.”
KC's View:
Can’t say it any better than that.

I can’t say that I have much hope for Sears, and Lampert says very little in the Journal interview to change my mind. He tells the paper that Sears doesn’t have to win over a new customers, just sell more to existing customers. First of all, that strikes me as patently absurd … and may be hard to do when it is reducing the number of categories in which it operates. He also seems to be trying to create a narrative in which Sears’ success will be dependent on vendors and mall owners being cooperative and patient, when he’s done very little to justify that sort of treatment.

He even says that “Sears didn’t always get credit for its innovations such as introducing curbside pickup and equipping its sales staff with iPads before it became fashionable to do so.” Which is nice to say, but ultimately didn’t matter because they were rare moments of marketing insight that took place inside a vacuum of retailing incompetence.