THE FALL OF SEARS HOLDINGS

THE FALL OF SEARS HOLDINGS

Sears Holdings owned Sears that was only one of the largest retailers, not only in the States but also in the world. In 2001, both Sears and Kmart made it among the top ten retailers in the  world. The fall of Sears was a quite a rollercoaster and gathered audience for a lot of investors and other stock market enthusiasts. Sears earnings turned a sour turning in the recent past and have been going down ever since.

The story of Sears Holdings is unfortunately and unquestionably coming to a rather tragic end. CEO, Edward S. Lampert managed to keep the lights on no matter how bad the financial circumstances got in both of his chains – Sears and Kmart. It must have been really upsetting to see customers abandon the company and avoid at all costs. If only a great attitude could rub off on a company’s performance, Lampent’s constantly sanguine perspective could have surely helped. Regrettably, the company has reached those extents of depression that is almost impossible to get out from.

The company went down from 2,601 stores in 2012 to only 1,002 stores at the end of 2017. Sears Holdings has a whopping $11 billion in liabilities and $7.26 billion in assets. The chains have lost more than 50% of its income which gave rise to such a poor position. The retailer has been losing a stream of money is the recent years which has caused irreparable damages to the company’s finances. It started with an enormous $1.1 billion in 2015, followed by a loss of $2.2 billion in 2016, around $2 million in 2017 and finally $508 million until Q2 of 2018.

Lampent tried very hard to sell a success story, but in vain, the company has been in the ruins for a while now and continues to get worse. Total Sears earnings depreciated from $22.1 billion to $16.2 billion in a year’s time. Recovering from that magnitude of a loss is time-consuming and in their case, futile. The owner, traders and the investors have suffered massive losses in the recent times.

Selling real estate has helped a lot in saving face but it is not even able to recover a small percentage of the loss. It is very likely the chain will reach a point where it will not be able to commit to its debt obligations. Eddie Lampent, apparently has a lot in store and wants to restructure the company. But after this massive drain of incomes, Sears Holdings might as well declare bankruptcy. It is a huge risk buying into Sears unless the optimistic CEO has something radical planned for the future.

Surprisingly, the only survivor of this financial mishap is Edward S. Lampent. No wonder he is so chipper because he knows he is going to be fine. He is the major stockholder, a significant lender and even owns some of its real estates.

No chain can survive by getting smaller in size and losing all of its sales. At least the quietus of the company enlightened people about that leverages can be a company’s worst enemies and cutting expenditures without enough investments kills the growth of a company.

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