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Edward Lampert's Sears Holdings Annual Letter 2013

February 28, 2013 | About:


Tonyg34 - 2 years ago
and losing money, did we mention how we keep losing money
AlbertaSunwapta - 2 years ago
An older Warren Buffett quote on Sears...

"Q: What is your opinion of the prospects for the Kmart/Sears merger? How will Eddie Lambert do at bringing Kmart and Sears together?

Nobody knows. Eddie is a very smart guy but putting Kmart and Sears together is a tough hand. Turning around a retailer that has been slipping for a long time would be very difficult. Can you think of an example of a retailer that was successfully turned around? Broadcasting is easy; retailing is the other extreme. If you had a network television station 50 years ago, you didn't really have to invent or being a good salesman. The network paid you; car dealers paid you, and you made money.

But in retail you have to be smarter than Wal-Mart. Every day retailers are constantly thinking about ways to get ahead of what they were doing the previous day.

Retailing is like shooting at a moving target. In the past, people didn't like to go excessive distances from the street cars to buy things. People would flock to those retailers that were near by. In 1996 we bought the Hochschild Kohn department store in Baltimore. We learned quickly that it wasn't going to be a winner, long-term, in a very short period of time. We had an antiquated distribution system. We did everything else right. We put in escalators. We gave people more credit. We had a great guy running it, and we still couldn't win. So we sold it around 1970. That store isn't there anymore. It isn't good enough that there were smart people running it.

It will be interesting to see how Kmart and Sears play out. They already have a lot of real estate, and have let go of a bunch of Sears' management (500 people). They've captured some savings already.

We would rather look for easier things to do. The Buffett grocery stores started in Omaha in 1869 and lasted for 100 years. There were two competitors. In 1950, one competitor went out of business. In 1960 the other closed. We had the whole town to ourselves and still didn't make any money.

How many retailers have really sunk, and then come back? Not many. I can't think of any. Don't bet against the best. Costco is working on a 10-11% gross margin that is better than the Wal-Mart's and Sams'. In comparison, department stores have 35% gross margins. It's tough to compete against the best deal for customers. Department stores will keep their old customers that have a habit of shopping there, but they won't pick up new ones. Wal-Mart is also a tough competitor because others can't compete at their margins. It's very efficient.

If Eddie sees it as impossible, he won't watch it evaporate. Maybe he can combine certain things and increase efficiencies, but he won't be able to compete against Costco's margins."

Rhsc - 2 years ago

Edward Lampert has his head up his ass. Sears Holdings has lost their way in the retail world. This company is concentrating on on using advanced tech such as the Ipads and Itouch computers to making the customer's experience better but infact makes things worse. The customer experience are more waiting for the electronics to either catch up to the current due to improper upgrading of the servers or to failure of the programs not wanting to connect properly. The so called APPS have to be reloaded on the fiy delaying the checkout process. Then you have people like the store managers that are only worried about the NUMBERs and not on the customer. Sears as a company has lost their customer focus!!!! One such store is at Hampton, Va. That store manager is a piss poor manager in that he do not listen to the customer and especially not his associates as they all agree that this electronic crap is slowing down the checkout process. Most customers want to get in and out within a few minutes unles there is good reason that the discovery process takes longer to ensure the customer get the right product to meet their needs. Edward Lampert needs to got off his throne and talk to the people at the bottom of the food change and listen to us.

Second, I predicited that the so called GREAT program "Shop Your Ways Rewards" was a real joke that it would evolve into a giveth and taketh away program. That is what is really is today!!! Sears will sucker you in to buy something expensive and for that they give 3 times the points but a week later you go back in to buy something with your points you find out that Sears has removed those points since you did not buy something else that day or within that time period. That is as bad as switch and bate!!! In my opinion that the general public is to advoid Sears and Kmart. In my opinion Sears has lost alot of its former glory with the loss of Customer Focus and underhanded methods.

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