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The Politics Of Self-Delusion: Don’t Be Like Eddie


So much has been written about the long, slow demise of Sears that most retail watchers don’t even bother anymore. We are watching the destruction of an institution, the original “Amazon,” and retail icon.

I thought I was done with it until I started leafing through the virtual pages of this month’s Vanity Fair and discovered that Sears CEO and Hedge Fund Manager Eddie Lampert had given his first interview in fifteen years to William D. Cohan.

Now I feel obligated to go through this long, sad saga one more time.

Late Breaking News

On Monday morning, Mr. Lampert called for the breakup of Sears Holdings Company into its component parts through his hedge fund, ESL Holdings. According to the Wall Street Journal , in a letter to the board of directors he magnanimously offered to purchase the Kenmore appliance brand, its home improvement business and its Parts Direct business. In other words, the remaining parts of the business that have any value at all. The remainder of this piece was written prior to that announcement. Maybe Eddie’s not so self-delusional after all. He’s a bit more like a vulture, I think.

Now, back to the original story.

I’m not sure what Mr. Lampert expected when he granted the interview. Perhaps, since Mr. Cohan is a business writer and former banker specializing in mergers and acquisitions he thought he’d get kinder treatment than the “traditional” media has been giving him (note that about a year ago, Mr. Lampert blamed the media for many of Sears’ troubles).

He didn’t anticipate Mr. Cohan seeking out Columbia Business School professor and former CEO of Sears Canada, Mark Cohen (note, in full disclosure, Professor Cohen is a fellow occasional Forbes contributor). But that’s what happened, and for every declaration Mr. Lampert made, Mr. Cohen had the “voice of a retailer” counterpoint. The short form of his responses is, “Dude, who are you trying to kid, exactly?”

And that remains the key question. What the heck was/is Mr. Lampert really thinking?

His friends call Mr. Lampert a “team guy.” Yet he has been unable to keep any kind of management talent in the Sears organization. His friends also claim he’s a very shy person who avoids the limelight, yet he bought, what was at the time the most expensive single family home ever purchased in Miami-Dade County. Forty-million dollars is not a shy buy, even in a town where almost anything goes.

According to his friend, Wall Street trader David Williams, Lampert is a “figure it out” kind of guy. Yet he hasn’t figured out that people from Roslyn, NY whose last name is spelled like his pronounce their name “Lam-pert” rather than the seemingly classier “Lam-bare.” As a Brooklyn girl whose father owned a clothing store quite near Roslyn, I had to laugh when I discovered where he grew up. I wonder if my father outfitted him for summer camp, and if I went along for the ride. He apparently hasn’t figured out that he’s made a total hash of things.

Mr. Lambert has, quite simply, driven Sears Holding Company into the ground. Just since he became CEO in 2013 the company has experienced $10.4 BILLION in losses and more importantly, annual revenue declines of 47%, to $22 billion. He has sold off iconic brands, allowed stores to deteriorate, and has become the company’s largest creditor. Yet he still claims to believe that at some point it’ll turn around.

I still can’t tell you for sure if he really believes his own story. All I know is it’s a fantasy. Sears is a dead company walking. It can’t be fixed by technology and it can’t be fixed by moving numbers around. It’s over.

By now, our readers know that RSR emphatically believes that the retail apocalypse is a false flag. Why do we believe that? Overall sales are still strong, and despite the drumbeat of store closings, even in two of our most recent studies, we could not find very many retailers of consequence who don’t have a brick and mortar presence. Stores will continue to be a vital part of the retailer ecosystem. There is no doubt.

We are, however, watching the Sears Apocalypse. The numbers tell the tale.

And so the moral of this story, my friends is simple: don’t be fooled. The numbers do tell the story. Don’t be like Eddie. Be a realist. Be a retailer. Carry products shoppers want to buy, sell them for a reasonable price and pay close attention to the signals the market sends you. Use technologies that improve your buying and selling decision-making. There are no magic bullets. Good retailing is good retailing. It’s undeniable, just as year after year of losses are undeniable. As a former boss of mine used to say, “When 10 people tell you you’re dead, it’s time to lie down.” As a retailer, Eddie has failed. As a hedge fund guy, he may well be a success. But we are retailers. And he’s a failure. Eddie, lie down.

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Articles & Opinions April 23, 2018
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