If you want to know what’s happening with a company, talk to insiders — or with former insiders, who are free to talk on the record. Like, for example, a former Sears executive who is now unfettered in his ability to give his honest opinion of the once-great retailer (and the man who has been steering the ship toward apparent doom).
Mark Cohen, a professor of retail at Columbia Business School, was previously the head of marketing for Sears Roebuck and the CEO of Sears Canada. He has been watching the slow-motion disaster at Sears Holdings from afar.
Cohen discussed the implosion with TheStreet (warning: auto-play video at that link), saying that he believes that the company cannot be saved.
He compared the company to a ship that’s on fire. For now, the company is throwing everything it can into the boiler to keep the ship going until it burns down to the water line.
“Eventually, when it does sink, they’ll pump it out again and refloat it with a smaller boat until there’s absolutely nothing left,” Cohen explains. Lampert, he says, is using the company “like an ATM machine [sic]” and extracting value while he sells off or spins off its real estate and anything of value that’s left.
“Eddie Lampert is either dishonest, delusional, and disingenuous or some combination of the three,” Cohen told TheStreet.
While the company’s leaders talk about a “transformation,” Cohen notes that the retailer has nothing going for it. It has sold its best real estate, or plans to, and has “a bad reputation with customers and vendors.”
Technically, Cohen worked for a different company. The current Sears Holdings was formed when Lampert bought Kmart out of bankruptcy, and Kmart acquired Sears Roebuck. A Sears Holdings spokesman also points out that the company fired Cohen before Lampert took over and began his first stint as CEO.
Cohen and Lampert have very different backgrounds: Cohen worked in retail for his whole business career, while Lampert made his fortune in finance and is notably hostile to the norms of the retail industry.
In non-Sears insights, he points out that Amazon is the biggest online success story, and Costco the biggest offline one. What do they have in common? They engineer customers’ loyalty by requiring memberships.