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
8 comments:
I expect Lampert's parting gift, his "golden parachute," is both vested and secured from the claims of creditors and their receiver.
Owen, if we had a genuinely progressive regime, one in which the rights of corporations were subordinated to the rights of labour, this fiasco might still occur but the loss sustained by employees could be greatly reduced. In any viable, liberal democracy, government recognizes a responsibility to balance the interests of labour and capital at least somewhat in favour of labour.
When was the last time we had a government committed to upholding the interests and wellbeing of labour, organized or non? Vulture capitalists and guys like Lampert only exist and operate with the sufferance of those same people we elect to office. It's akin to how Stiglitz shows in "The Price of Inequality" that inequality - of wealth, of income and of opportunity - is almost entirely legislated and has little to do with market or merit influences.
Even our current prime minister is always on about trade and growth and globalization and yet the rights and interests of labour never pass his lips. Where's the balance in that?
The Sears bankruptcy is casebook example of how the New World Order operates, Mound. We live in The New Feudal State.
It is not enough to say Eddie Lampert is incompetent as a retailer; that was never his intent. Eddie Lampert was there to take and take and take and after there is nothing left but ashes he will find a way to take some more. In the movie, Gordon Gecko was the bad guy. Things won't change until we all see Eddie Lampert and all those like him as bad guys.
Unfortunately, Toby, far too many people believe that the woman who wrote The Fountainhead knew what real heroes were made of.
Economics Soprano style. The bust up is the mobs best friend. It also is explained succinctly in Goodfellas.
Oh I almost forget the most brilliant bust up lately. US Steel on Stelco.
"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs."
The Lord of the Rings works on several levels, Steve. Atlas Shrugged is one long diatribe.
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