Economy Sears in Chapter-11 Bankruptcy Protection, Lampert and Mnuchin Sued For Alleged "Theft" of Billions

[Ruprecht]

Back to Sears, it's pretty ironic and sad that a company that started as a catalogue business ended up dying because they went retail while online catalogues killed them.

It's easy to say in hindsight but we could have been going to sears.com for all of our ordering needs instead of amazon.com if someone had seen the writing on the wall. I know they tried on Prodigy but it was too far ahead of its time.

I don't know how logical or feasible it would be but if you wanted to save Sears, I would start a big campaign saying that they are going head to head with Amazon. Offer a cheaper Prime, good deals and most importantly, turn their existing locations into warehouses. You could offer in-store pick up on items as well as have strategically played locations around the country for easy delivery.

It's probably far too late for that but if they had one last chance at survival, I'd start a war with Amazon.

Amazon is a tech company these days, and their scope completely eclipses anything Sears has ever been.

 

[MikeMcMann]

What's going to happen to the auto industry? Or what's going to cause them to drop IYO?

Millennials and younger are happening.

Right now the only people who visit autodealerships to buy cars are people over 35. People under 35 do almost the entire purchase online with the car delivered to their driveway and they never step foot in a dealership.

that is a vast change from just 7 years ago when an average car purchase took 4-7 Dealership.

The thing that is saving the Dealerships now is the people with all the money and buying and turning over cars constantly are over the age 35. So the market is still strong.

but as those 35 year olds and younger move into their prime earning years and start making the bulk of buying decisions you will see the auto industry gutted. The Retail malls got hit earlier as they tend to service the younger folk more so the age curve hit them sooner.

You already see some of the manufactures (Tesla, Hyundai) moving away from the Giant Dealership model and more into direct sales and putting cars, ironically, in Malls and other non traditional places.

I foresee a future where the privately owned Dealership model is dead (probably in the next 20 years) and instead major manufacturers just have strategically located drive centers where you can go see, touch and drive a model if you are one of those old school freaks who still wants to do that.

 

[MikeMcMann]

Back to Sears, it's pretty ironic and sad that a company that started as a catalogue business ended up dying because they went retail while online catalogues killed them.

It's easy to say in hindsight but we could have been going to sears.com for all of our ordering needs instead of amazon.com if someone had seen the writing on the wall. I know they tried on Prodigy but it was too far ahead of its time.

I don't know how logical or feasible it would be but if you wanted to save Sears, I would start a big campaign saying that they are going head to head with Amazon. Offer a cheaper Prime, good deals and most importantly, turn their existing locations into warehouses. You could offer in-store pick up on items as well as have strategically played locations around the country for easy delivery.

It's probably far too late for that but if they had one last chance at survival, I'd start a war with Amazon.

Walmart is waging that war.

As someone stated upthread Walmart was late to the online game but they have invested heavily and are not afraid to acquire to broaden their footprint in the space. Walmart also has the best Logistics and Distribution system of any retailer which is what they are using as their leg up in this fight. We now see Amazon trying to buy up strategic located Retail space that they can use as logistics hubs to ship other goods from (Whole Foods). So in that area they are playing catch up with Walmart.

I foresee Amazon breaking itself up willingly into a few different businesses so each can get the proper focus. Many think AWS (amazon web services) is the future big revenue driver of the company and that has little to do with retail sales which may be a maturing business line for Amazon in the next few years.

 

[Michaelangelo]

Edward Lampert, chairman of Kmart, left, with Aylwin Lewis, president of Kmart, center, and Alan Lacy, CEO of Sears at the announcement of a merger between Kmart and Sears in 2004.

all 3 have last names starting with L. No wonder they’re losers.

 

[Arkain2K]

Sears sues former CEO Eddie Lampert, Treasury Secretary Mnuchin and others for alleged ‘thefts’ of billions from retailer
Published Thu, Apr 18 2019

Sears on Thursday lodged a lawsuit against its former CEO Eddie Lampert and a string of its high-profile past board members, including his former Yale roommate Treasury Secretary Steven Mnuchin, for allegedly stealing billions of dollars from the once-storied retailer.

Sears Holdings filed for bankruptcy this past October, after years of losses under Lampert, who was then its chairman, CEO and largest shareholder. Lampert saved the retailer from complete liquidation by buying it through Transform Holdco, an affiliate of his hedge fund ESL Investments.

But Sears’ unsecured creditors repeatedly argued that Lampert was the cause of, not the solution to, Sears’ downfall. They believe that Lampert, along with Sears’ biggest shareholders, unduly benefited from deals that occurred under Lampert’s watch, including its spinoff of Lands’ End in 2014, and the carve out of many of its best properties into Seritage Growth Properties, a real estate investment trust Lampert created a year later.

Those claims laid the groundwork for the unsecured creditors to pursue their claims against Lampert and others on behalf of Sears. Lampert had requested a release from potential ligation as part of his deal to buy Sears out of bankruptcy but was denied the protection.

“Altogether, Lampert caused more than $2 billion of assets to be transferred to himself and Sears’ other shareholders and beyond the reach of Sears’ creditors,” the lawsuit alleged on Thursday.

Among the allegations lobbed at Lampert, the company said he rejected a $1.6 billion offer for Lands’ End from private equity firm Leonard Green & Partners and the Tommy Hilfiger investment group in favor of a spin that would keep his stake in the brand untouched.

It cites an email from the company’s then-CFO, Robert Schriesheim, who explained to another Sears employee that ”[Lampert] was trying to optimize cash for [Sears] while maximizing his (esl) equity stake ... because he knows that [Lands’ End] is worth a great deal outside of [Sears].”

The filing claims Lands’ End was distributed to Lampert, ESL and other Sears’ shareholders for no consideration, following a prespin dividend of $500 million. On the stock’s first day of trading, its value topped $1 billion, with Lampert’s share worth at least $490 million. The stock currently has a market value of $591.3 million.

It further alleges that Seritage’s deal with Sears to give it ownership of 266 of Sears’ best retail stores was not negotiated and undervalued the properties by at least $649 million.

“The appraisals were fundamentally flawed and, among other things, intentionally used under-market future lease rates as the sole basis for their valuations,” the suit alleged.

Sears created committees to review each of its transactions, but the suit alleges those committees relied on “solvency opinions and appraisals based on false projections” even as Sears was in its financial “death spiral.”

The suit also claims that, “In an effort to create a false record to cover up their asset stripping, at Lampert’s personal direction, Sears employees repeatedly produced financial plans reflecting fanciful, bad-faith predictions that the company would experience an immediate and dramatic turn-around from deep and mounting losses to sudden profitability.”

The suit names numerous defendants besides Lampert and Mnuchin, including two high-profile directors: Bruce Berkowitz, a hedge-fund manager who was a large investor in Sears, and Kunal Kamlani, president of ESL.

“ESL Investments, Inc. vigorously disputes the claims in the debtors’ complaint against ESL, Mr. Lampert and Mr. Kamlani, which repeats baseless allegations and fanciful claims. As we have previously said, the debtors’ allegations are misleading or just flat wrong,” a spokesman from ESL said.

Mnuchin, who resigned from the Sears board when he was nominated to head Treasury, wasn’t immediately available to comment.

“Fairholme is in the process of reviewing the filings,” said a spokesman for Berkowitz’s hedge fund, Fairholme Capital Management.

Berkowitz took his own swing at Lampert’s management of Sears last year, when a lawyer for Fairholme told the bankruptcy court that Sears was “not so much a melting ice cube as it is a puddle.” He called the retailer’s tumble from grace a “multi-year liquidation” that happened “without court supervision.”

https://www.cnbc.com/2019/04/18/sea...steven-mnuchin-others-for-alleged-thefts.html

 

[Anung Un Rama]

wow, that doesn't even take into consideration the jobs lost; I wonder, if these allegations are true if there would be grounds for a civil suit?
@Zankou @panamaican @Trotsky @Lord Coke @Other 3-4 dozen sherdog lawyers. (you guys should have a legal forum or group like @Clippy Island, you can name it Sherdog, Sherdog, Sherdog, & Sherdog Attorneys at Law)

 

[JonesBones]

Millennials and younger are happening.

Right now the only people who visit autodealerships to buy cars are people over 35. People under 35 do almost the entire purchase online with the car delivered to their driveway and they never step foot in a dealership.

that is a vast change from just 7 years ago when an average car purchase took 4-7 Dealership.

The thing that is saving the Dealerships now is the people with all the money and buying and turning over cars constantly are over the age 35. So the market is still strong.

but as those 35 year olds and younger move into their prime earning years and start making the bulk of buying decisions you will see the auto industry gutted. The Retail malls got hit earlier as they tend to service the younger folk more so the age curve hit them sooner.

You already see some of the manufactures (Tesla, Hyundai) moving away from the Giant Dealership model and more into direct sales and putting cars, ironically, in Malls and other non traditional places.

I foresee a future where the privately owned Dealership model is dead (probably in the next 20 years) and instead major manufacturers just have strategically located drive centers where you can go see, touch and drive a model if you are one of those old school freaks who still wants to do that.

This doesn't sound right. I need a source on this.

Also, I wouldn't buy a new car period. They are one of the fastest depreciating "assets" there is. I think it is loses like 10% the second the you drive it off the lot. lol. Most people should buy one that is at least 5 years old. Let some other fool pay the deprecation costs.

 

[Clippy]

wow, that doesn't even take into consideration the jobs lost; I wonder, if these allegations are true if there would be grounds for a civil suit?
@Zankou @panamaican @Trotsky @Lord Coke @Other 3-4 dozen sherdog lawyers. (you guys should have a legal forum or group like @Clippy Island, you can name it Sherdog, Sherdog, Sherdog, & Sherdog Attorneys at Law)

It's an empire now - we moved up in the world

 

[cincymma79]

This doesn't sound right. I need a source on this.

Also, I wouldn't buy a new car period. They are one of the fastest depreciating "assets" there is. I think it is loses like 10% the second the you drive it off the lot. lol. Most people should buy one that is at least 5 years old. Let some other fool pay the deprecation costs.

Oh it can be as much as 40%.
https://www.google.com/amp/s/conten...astest-depreciating-cars-2018-281474979862017


I only buy 5 year old cars and older cash. Honda or Toyota will get you 300000 miles with a little care. They will literally stink from decades of ass sweat before they stop running. You guys keep making those 500 a month payments though.

 

[floivanus]

Oh it can be as much as 40%.
https://www.google.com/amp/s/conten...astest-depreciating-cars-2018-281474979862017


I only buy 5 year old cars and older cash. Honda or Toyota will get you 300000 miles with a little care. They will literally stink from decades of ass sweat before they stop running. You guys keep making those 500 a month payments though.

Can confirm, 2004 civic; 311k on it, until the polar vortex took her out.

Car overheated, in -30 temperatures. Oh well

 

[Arkain2K]

Now that they have sold the "Craftsman" brand to Stanley Black & Decker, the new bet is on the DieHard brand.

Sears hoping DieHard can power sales of everything from garden tools to camping gear
Lauren Zumbach, Chicago Tribune | Apr 20, 2019

Sears has boasted its DieHard batteries can start a car after being baked in an oven, frozen in ice, shot with a rifle or stranded for months on a frozen lake.

The latest test: whether DieHard can also power Sears’ business by putting the brand on everything from lawn and garden products to camping gear.

The retailer, trying to move forward after exiting bankruptcy in February, recently unveiled a new branding and marketing campaign for the Sears and Kmart chains. Now, it’s DieHard’s turn.

The challenge? Sears’ slide from the country’s biggest retailer to a company battling for survival took a toll on DieHard, too, said Buddy Lo, senior technology and consumer electronics analyst at market research agency Mintel.

“When I hear DieHard, I think of Bruce Willis before I think of car batteries,” Mr. Lo said, referring to the action movies starring Mr. Willis.

Sears launched DieHard in 1967, after putting nine years of research and more than $1 million into a new auto battery designed to have extra starting power.

Since then, Sears has sold DieHard-brand battery chargers, jump starters, flashlights and alkaline batteries. It has added products outside the battery category, like work boots and other auto products, starting with tires in 2016.

The success of those items isn’t lost on Peter Boutros, chief brand officer of Sears and Kmart and president of the Kenmore, Craftsman and DieHard brands. DieHard can stretch even further to products as wide-ranging as riding lawn mowers and off-road bikes, he said.

To do that, they’ll need partner companies to make those items. A few dozen potential licensees gathered at an event at the company’s headquarters earlier this month, where Mr. Boutros outlined the company’s vision for the brand from a conference room stage with a new DieHard logo — a black “D” speared by a blue shard. The brand also has a new tagline, trading “Life demands DieHard” for “Power ahead.”

The plan: leverage DieHard’s reputation for performance, durability, ruggedness and innovation and target consumers who Mr. Boutros said have the DieHard “mindset.”

The company is working on deals with auto battery and footwear makers but had no new products to unveil at the licensee event. Instead, Mr. Boutros showed images of concepts they’re considering, like auto and garage tools, lawn and garden products and adventure gear, like off-road bikes.

Other images showed sample store displays. One was stocked with DieHard work wear, another with hiking boots, flannel shirts and caps.

Last year, Sears sought trademarks on a full slate of power and hand tools, including lawn and garden equipment and tool boxes, along with apparel, backpacks, coolers, remote control vehicles and energy drinks.

Sears already created one brand with a strong reputation for tools and lawn and garden products: Craftsman. But it sold Craftsman to Stanley Black & Decker in 2017, in a deal valued at $900 million.

Under that agreement, Sears can still make and sell Craftsman products, and Mr. Boutros said the company isn’t trying to replace Craftsman with DieHard.

But Sears and Stanley have butted heads over the brand since the sale. Stanley, which sells its Craftsman products at retailers like Lowe’s, filed a lawsuit last month asking the courts to make Sears stop promoting itself as “the real home of the broadest assortment of Craftsman.” At the licensee event, Mr. Boutros defended Sears’ links to the brand “regardless of what the other retailers are screaming about.”

While Sears could end up selling competing Craftsman and DieHard versions of the same products, the brands would have a different look and feel and target different customers, Mr. Boutros said. He likened it to the way soda drinkers tend to identify with either Coke or Pepsi.

“The Craftsman customer is a craftsman, and the DieHard customer is a diehard,” he said.

Mintel’s Mr. Lo said he thinks there is an opportunity to bring DieHard’s battery expertise to outdoor gear. You can’t post summit selfies if your camera battery runs out of juice, and people increasingly want to use technology to stay connected even in off-the-grid places, he said.

“Energy demand on the go has never been higher,” Mr. Lo said.

But the outdoor gear market is competitive, and DieHard’s brand has declined along with Sears, he said.

A lower-profile brand does have one upside, according to Kevin McTigue, associate professor of marketing at Northwestern University’s Kellogg School of Management: It probably doesn’t have much baggage.

The expansion into new categories “could be done well and thoughtfully if they make good products, get further away in a methodical way and keep those great attributes,” he said.

Still, the more a brand strays from its core product, the more consumers can struggle to link the brand’s reputation to new goods, he said.

“It’s a little harder to pull that off and have consumers come with you,” he said.

https://www.post-gazette.com/busine...-DieHard-batteries-Kmart/stories/201904200031

 

[nicapica]

sears was cool about 10 years ago to get craftman tools and some cheap levis. last time I went before they closed it had the strangest ghost town vibe.

 

[nicapica]

What about my lifetime warranty on tools?

im looking at all the craftman bs i bought thru out the years right now.