The New York Times has a story about hedge fund owner Edward S. Lampert, who during his time as CEO and major stockholder in Sears and Kmart has presided over a company that "may be setting a benchmark for slow, painful declines thanks to its outsize, long-term bet" on the two retailers.
An excerpt:
"Where did someone as smart, successful and hard-working as Mr. Lampert go wrong? His initial concept to combine two iconic but deeply distressed retailers — Kmart and Sears — initially appealed to many investors as a classic investment in undervalued, poorly managed assets in the Warren Buffett style. But Mr. Buffett doesn’t personally manage his portfolio companies. Several former Lampert investors (said) that Mr. Lampert’s fundamental mistake was one common to many once-successful hedge fund managers: hubris, and the belief that investment prowess would translate into management skill."
You can read the entire piece here.
An excerpt:
"Where did someone as smart, successful and hard-working as Mr. Lampert go wrong? His initial concept to combine two iconic but deeply distressed retailers — Kmart and Sears — initially appealed to many investors as a classic investment in undervalued, poorly managed assets in the Warren Buffett style. But Mr. Buffett doesn’t personally manage his portfolio companies. Several former Lampert investors (said) that Mr. Lampert’s fundamental mistake was one common to many once-successful hedge fund managers: hubris, and the belief that investment prowess would translate into management skill."
You can read the entire piece here.
- KC's View:
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So, a thought here...
This week, I was at the Plug and Play startup accelerator in Sunnyvale, California, where relationships with established with large, existing companies serve to give them access to the young startups and entrepreneurs who take space there. During a tour, I noted that Sears was one of the companies listed as a partner, asked about it, and was told that Sears only has signed on in the past few weeks.
My response: "It is a little late."
But ... I've been thinking about that, and I'm wondering if, in fact, Sears wants access to startups and entrepreneurs not in search of way to revive its retail business, but because it is seeking unorthodox and innovative approaches for dealing with all the real estate that it owns and that is growing less and less relevant as retail businesses.
I could be wrong about this. It also could be that Sears was being swallowed by the shark before realizing that it needed a bigger boat.
The folks at Plug and Play certainly aren't saying. And I'm only speculating.
