Sears -- both here and in the United States -- is on its deathbed. These are not easy days for retailers. Companies like Amazon have changed the rules. But, Alan Freeman writes, if you want to know the real reason Sears is about to go under, take a good look at Eddie Lampert:
Lampert is no small-time guy. A hedge fund billionaire, he hit number 67 in the Forbes List of the 400 Richest Americans. His 288-foot super-yacht (named The Fountainhead after the novel by Ayn Rand, goddess of the libertarian right) is reportedly valued at US$130 million. In 2012, as Sears in the U.S. was reporting a US$2.4 billion loss, Eddie bought himself a US$40 million mansion on Indian Creek Island in Florida.
Lampert owns 45 per cent of Sears Canada. Sears Holdings, also controlled by Lampert, owns another 12 per cent. The stock is now essentially worthless.
In the meantime, thousands of retail workers at Sears Canada — who worked for decades for modest wages in the expectation of severance pay if they lost their jobs, and a defined-benefit pension when they retired — now find they aren’t getting a cent in severance and risk seeing their pensions reduced significantly. (Sears Canada has sought court protection from its creditors in the hope of reviving the business or selling it off. Neither prospect seems likely. It probably will end up in liquidation.)
The U.S. parent, Lampert-controlled Sears Holdings, is in only slightly better shape. It announced in March that “substantial doubt exists related to the company’s ability to continue as a going concern.” It too has been selling off assets for years as customers flee its stores and the company continues to add to its losses.
One of Sears' former CEO's -- Mark Cohen -- has Lampert's number. He now teaches at Columbia University's business school. Lampert, he says,
“seemed to think he was smarter than anyone in the retail business but he had no idea how to run the company from Day 1. One thing I teach is that core competencies are the basis for success or failure. Lampert had no experience in retail and no management competency whatsoever.”
Sears will go the way of Simpsons and Eaton's. Their employees are up the creek. But you can bet that Lampert will try to sail his yacht in any puddle he finds before him. And, who knows, one day he may become President of the United States.That seems to be what happens to vulture capitalists these days.
Image: Huffington Post