Lot of email Friday in reaction to our story about the continuing problems of Sears and Kmart post-merger (which we entitled “Dead Company Walking?), criticism of company CEO Edward Lampert, and our commentary, which read:
Somebody tell us what Ksears stands for?
That is, besides lousy customer service, surly and/or depressed employees, ample out-of-stocks, mediocre prices, lack of strategic vision, and a chairman who seems more interested in the company’s real estate potential than in actually marketing and merchandising anything.
This latter point became clear when Fast Eddie put himself in charge of marketing and merchandising functions…an interesting move since, as we said at the time, he knows more about how to sell hedge funds than hedge clippers.
Hard to imagine that this will end well for anyone. Except, of course, for Fast Eddie. Guys like that always have an exit strategy, a Plan B, that will allow them to recoup any losses.
One MNB user took issue with our characterization of the company:
You’ve outdone yourself with the disrespect you show in your comments. When you refer to the company’s leader as Fast Eddie, are you showing the same objectivity you do when you write about Lee Scott? It’s easy to jump on the bandwagon with the Detroit News there is little love lost in Detroit Metro for Kmart leadership and now that they moved to Chicago it’s probably no better.
Granted the firm has a long way to go, but if you visit a Sears Grand and see the Pantry & gift section in a mall location with a great layout, new signs and appealing layout you would have a new topic to write about instead of the same old negative news out there by other reporters. Check it out.
There are a lot of folks who think we show anything but objectivity and respect when we write about Lee Scott and Wal-Mart. It’s all perception.
But you’re right. We were being disrespectful.
As Marlow once said to General Sternwood, “I test very high on insubordination…”
Also, to be fair, our opinion was shared by an awful lot of people…
MNB user Don Gallegos wrote:
From the first time I saw the announcement of the merger my thought was now that 2 lousy companies have merged there is only one lousy company. Poor service, dirty stores and quite frankly junk stores. They are already out of business, they just haven't physically left yet.
MNB user David Livingston wrote:
Still lots of bold talk about how they are going to convert 400 Kmarts to Sears Essentials. Heck, I'm still waiting for all those Sears Grand stores to open they promised. I don't believe they will ever really open a significant number of Sears Essentials stores but will keep promising and promising. In the meantime, Wal-Mart, Target, and Kohls will keep opening more and more stores. I doubt any of those companies will lose any sleep wondering if a Sears Essentials will impact them.
MNB user Steve Richards wrote:
The Sears and Kmart merger brought together 2 companies that were floundering. Who are they and who do they want to be seemed to be a huge question. Both toyed with food in their stores and were unsuccessful in this. This merger can be one that reduces costs but there is no evidence of any sales growth strategies. Kmart is caught between Wal-Mart and Target. They appeal to the Wal-Mart shopper more than the Target shopper but cannot execute like Wal-Mart.
The Sears model has been floundering for years and will continue to do so. Five years from now they will either be gone or so reduced in= size that they will be a faint memory.
MNB user Bob Vereen wrote:
To put things in perspective, Sears hopes to have 50 Sears Essential stores by the end of the year, but it will be competing with more than 600 new Wal-Marts added this year, several hundred Targets and more than 300 new Home Depot and Lowes units, which will be selling appliances and tools and paint, to compete with Sears' Craftsman tools and Weatherbeater/Easy Living paints.
Too little, too late and, in addition, poorly done stores.
MNB user Scott Arnold wrote:
You have said it all about Ksears on several occasions. As someone your age who grew up with Sears, I find it painful to even go in the local store. Heck, I remember the day it opened in the early 1960's I can go on and on, but you know the tale.
Rhetorical question: At this point which happens first: the total collapse of the once proud Great Atlantic & Pacific Tea co, or the equally proud Sears& Roebuck and co? As you have said, BOTH are "dead company walking…”
Fast Eddie will bail out and someone else will be holding the bag.
MNB user David Lichtman wrote:
I had the opportunity to check out one of the Kmart stores that has been reset to include Craftsman (it's nearby in White Plains, NY).
The store looks infinitely better, but unfortunately for Kmart, I was able to get a good look at it because it was virtually devoid of customers on a Wednesday evening.
The Craftsman displays look great in a vacuum, but make no sense whatsoever in the store. The price points are too high for Kmart shoppers and the rest of the store is priced too low for someone who would want to buy Craftsman.
The baby area was much smaller in the new format, a decision that may help profitability in some ways, but is sure to reduce already challenged traffic numbers.
And with the visit coming right after a visit to the nearby Target, I was amazed to see identical end cap items priced 10% or so higher in Kmart.
And although I am a fellow skeptic, I'm not so sure what Eddie's exit strategy is. The only way he could sell his stake would be on a takeout from another player, which I think is incredibly unlikely. And if he tried to sell any amount of shares, the stock would get crushed. His hedge fund gets to take a 20% management fee on any appreciation in the stock, which at today's price would net him 20% x $20x 65 million shares (a cool $260 million on top of the $1b he earned last year), so I'm not shedding any tears for him. But I think he is in this for the long haul, win or lose.
And a long haul it may well be.
Long, long, long haul.
Somebody tell us what Ksears stands for?
That is, besides lousy customer service, surly and/or depressed employees, ample out-of-stocks, mediocre prices, lack of strategic vision, and a chairman who seems more interested in the company’s real estate potential than in actually marketing and merchandising anything.
This latter point became clear when Fast Eddie put himself in charge of marketing and merchandising functions…an interesting move since, as we said at the time, he knows more about how to sell hedge funds than hedge clippers.
Hard to imagine that this will end well for anyone. Except, of course, for Fast Eddie. Guys like that always have an exit strategy, a Plan B, that will allow them to recoup any losses.
One MNB user took issue with our characterization of the company:
You’ve outdone yourself with the disrespect you show in your comments. When you refer to the company’s leader as Fast Eddie, are you showing the same objectivity you do when you write about Lee Scott? It’s easy to jump on the bandwagon with the Detroit News there is little love lost in Detroit Metro for Kmart leadership and now that they moved to Chicago it’s probably no better.
Granted the firm has a long way to go, but if you visit a Sears Grand and see the Pantry & gift section in a mall location with a great layout, new signs and appealing layout you would have a new topic to write about instead of the same old negative news out there by other reporters. Check it out.
There are a lot of folks who think we show anything but objectivity and respect when we write about Lee Scott and Wal-Mart. It’s all perception.
But you’re right. We were being disrespectful.
As Marlow once said to General Sternwood, “I test very high on insubordination…”
Also, to be fair, our opinion was shared by an awful lot of people…
MNB user Don Gallegos wrote:
From the first time I saw the announcement of the merger my thought was now that 2 lousy companies have merged there is only one lousy company. Poor service, dirty stores and quite frankly junk stores. They are already out of business, they just haven't physically left yet.
MNB user David Livingston wrote:
Still lots of bold talk about how they are going to convert 400 Kmarts to Sears Essentials. Heck, I'm still waiting for all those Sears Grand stores to open they promised. I don't believe they will ever really open a significant number of Sears Essentials stores but will keep promising and promising. In the meantime, Wal-Mart, Target, and Kohls will keep opening more and more stores. I doubt any of those companies will lose any sleep wondering if a Sears Essentials will impact them.
MNB user Steve Richards wrote:
The Sears and Kmart merger brought together 2 companies that were floundering. Who are they and who do they want to be seemed to be a huge question. Both toyed with food in their stores and were unsuccessful in this. This merger can be one that reduces costs but there is no evidence of any sales growth strategies. Kmart is caught between Wal-Mart and Target. They appeal to the Wal-Mart shopper more than the Target shopper but cannot execute like Wal-Mart.
The Sears model has been floundering for years and will continue to do so. Five years from now they will either be gone or so reduced in= size that they will be a faint memory.
MNB user Bob Vereen wrote:
To put things in perspective, Sears hopes to have 50 Sears Essential stores by the end of the year, but it will be competing with more than 600 new Wal-Marts added this year, several hundred Targets and more than 300 new Home Depot and Lowes units, which will be selling appliances and tools and paint, to compete with Sears' Craftsman tools and Weatherbeater/Easy Living paints.
Too little, too late and, in addition, poorly done stores.
MNB user Scott Arnold wrote:
You have said it all about Ksears on several occasions. As someone your age who grew up with Sears, I find it painful to even go in the local store. Heck, I remember the day it opened in the early 1960's I can go on and on, but you know the tale.
Rhetorical question: At this point which happens first: the total collapse of the once proud Great Atlantic & Pacific Tea co, or the equally proud Sears& Roebuck and co? As you have said, BOTH are "dead company walking…”
Fast Eddie will bail out and someone else will be holding the bag.
MNB user David Lichtman wrote:
I had the opportunity to check out one of the Kmart stores that has been reset to include Craftsman (it's nearby in White Plains, NY).
The store looks infinitely better, but unfortunately for Kmart, I was able to get a good look at it because it was virtually devoid of customers on a Wednesday evening.
The Craftsman displays look great in a vacuum, but make no sense whatsoever in the store. The price points are too high for Kmart shoppers and the rest of the store is priced too low for someone who would want to buy Craftsman.
The baby area was much smaller in the new format, a decision that may help profitability in some ways, but is sure to reduce already challenged traffic numbers.
And with the visit coming right after a visit to the nearby Target, I was amazed to see identical end cap items priced 10% or so higher in Kmart.
And although I am a fellow skeptic, I'm not so sure what Eddie's exit strategy is. The only way he could sell his stake would be on a takeout from another player, which I think is incredibly unlikely. And if he tried to sell any amount of shares, the stock would get crushed. His hedge fund gets to take a 20% management fee on any appreciation in the stock, which at today's price would net him 20% x $20x 65 million shares (a cool $260 million on top of the $1b he earned last year), so I'm not shedding any tears for him. But I think he is in this for the long haul, win or lose.
And a long haul it may well be.
Long, long, long haul.
- KC's View:
