Sears is bankrupt, closing stores and nixing jobs, but its hedge fund owner has offered to buy the store…from himself, in hopes of keeping the doors open for a few more weeks.
I’m utterly befuddled by the financial legerdemain, but I think the current owner’s hedge fund will swap its company debt for ownership (yeah, I’m already lost), while a partner will put in cash so it can protect the value of its credit derivative swaps (those products helped crash the economy in 2008).
If successful, the remaining stores will remain open at least through the remainder of the holiday season.
Like zombies in an episode of The Walking Dead.
Talk about a depressing, soul-destroying business strategy…many of those stores looked like they’d been abandoned long before the bankruptcy filing, and employees must feel somewhat like ghosts of their former selves.
If you had a hot product you hoped to sell to holiday shoppers, would you ship it to Sears stores or, perhaps, anywhere else first?
I know it’s heresy, but I have never believed that Sears was doomed. It’s just too easy and convenient to blame macro trends for micro failures, and there are any number of examples of geophysical retailers that are finding new currency and relevance with consumers.
If opening a storefront (or buying a chain of them) works for Amazon, why couldn’t it work for Sears?
The failure was in the vision for the business, and this latest financial nonsense is just the latest example, if not the last. I did a Brand Populist podcast about some of the things that Sears could have tried to do — really crazy, wacky, risky stuff — because that’s what successful companies choose to do, and those that are under duress need to do.
Instead, it’s getting only more financial wizardry, which will result in some haunted house versions of the stores staying open just long enough to grasp every penny they can, after which the old debt holders/new owners will probably wring more pennies out of selling off every rack, fixture, and light bulb before leaving the storefronts empty.
Only then will its owners retire to their penthouses, and Sears allowed to rest in its grave.
The only question is who’re the zombies?