The New York Times has a story about the decline of Sears, the once-mighty retail giant, which is teetering on the edge of bankruptcy. A bankruptcy filing may occur tonight. [Please see the Update: the filing has now occurred.]
The article is well worth a read. Sears has been on a long downhill slide for some time now. What has not helped is the takeover of the company by Edward S. Lampert, an Ayn Rand acolyte and hedge fund manager, who also happened to be the roommate at Yale of Steven Mnuchin, Trump’s Secretary of the Treasury.
I’ve read about Lambert’s management style previously. He has set one department (e.g., women’s wear) against another (e.g., home applianced) in a dog-eat-dog fight for staffing resources, advertising dollars, etc., instead of having them work together to bring customers into the store for one item and then entice them with other offerings.
The Times story portrays Lampert as having off-loaded company assets for his own benefit and to the detriment of the ongoing business and its employees.
It’s worth a read.
Monday, Oct 15, 2018 · 11:50:02 AM +00:00 · Rashaverak
The filing has occurred.
Now, the retailer is aiming to use a Chapter 11 bankruptcy filing in federal court in New York to cut its debts and keep operating at least through the holidays.
As part of the reorganization plan, Sears has negotiated a $300 million loan from Wall Street lenders to help keep its shelves stocked and employees paid.
The company said it was still negotiating with Mr. Lampert’s hedge fund, ESL Investments, for an additional $300 million loan. Mr. Lampert will step down as Sears chief executive, but will remain the company’s chairman. Three other Sears executives will serve in a newly created role, the office of the C.E.O., overseeing daily operations.
“ESL invested time and money in Sears because we believe the company has a future,” Mr. Lampert said in a statement on Monday.
Link.