Look, shoppers and members of the media. Eddie Lampert, the chairman, chief executive officer, and biggest shareholder in Sears Holdings Corporation, owner of Sears and Kmart, wants us to stop using the “B” word when talking about the company, because it spooks suppliers and shoppers. That word, of course, is “bankruptcy.”
It’s speculation that the retailer is about to go bankrupt, Lampert told the Chicago Tribune in an interview this week, that is making the company’s suppliers skittish and maybe even driving customers away.
“Every time people use the word bankruptcy, somebody who reads that doesn’t get past that word,” he said. “It makes it very unfair for us, and it’s a very uneven playing field for us.”
Dedicated Sears-watchers will want to check out the whole interview, but here are some highlights that are potentially of interest if you’re one of the many people who used to shop at Sears and Kmart.
On the retail apocalypse: Lampert notes that the company started the transition to e-commerce. “Preparing the company for this day and age is something we’ve been working on for the last dozen years.”
Why did everyone fuss over Costco’s new credit card last year, but hardly anyone paid attention to Sears’ transition to a Shop Your Way Rewards branded credit card?
“When we come out with our card, people only talk about closing stores,” Lampert told the Tribune. Consumerist didn’t mention that, though we did point out that the company’s plan to depend on Shop Your Way to turn things around may be a bit misguided.
Costco’s card was notable because customers adored it. Shoppers once had to have an American Express card to shop at the warehouse club, and the end of AmEx’s deal with Costco was a big deal for that company.
Why not file for bankruptcy now? It’s also possible that Lampert hasn’t finished spinning off Sears businesses and selling their resources, which would protect him as the company’s biggest shareholder if the company were to file for Chapter 11 bankruptcy protection.
Mostly, though, he points to the company’s retirees, who joined the company in a different era and depend on it for their pensions, and the company’s attempts to keep the pensions funded.
“The choice that I’ve made, the choice of the company and board to honor those obligations, it’s something we took very seriously but it’s come at a tremendous cost,” Lampert explained.
Understatements: “If we were making a meaningful amount of money it would enable us to move much faster in our transformation.”
Yes, about that “transformation.” If stores were spruced up a bit or briefly closed so they could move renovations and store consolidations along faster, maybe customers wouldn’t be turned off and would spend more money.
On vendors: If you notice that the shelves are a little bare or filled with very old merchandise at Sears and Kmart, it’s because the retailer’s reputation with vendors has deteriorated. Based on Lampert’s comments in this interview, it may be worse than we had thought.
“If you’re a vendor, and want to do business with us, then you have to treat us like a customer, you don’t treat us like a pariah,” he said. “I’ll take an even playing field, I’ll take an uneven playing field, but what I won’t do is basically not even let us on the playing field or let the game be fixed by people exploiting a certain amount of uncertainty.”