Thread regarding Sears layoffs

SHC (Sears holding) will survive, Sears itself could go either way

To everyone who is quoting Eddie about no new customers. Listen to what "pgp" said. It is not that Eddie does not want anymore customers it is that he does not need customers to fulfill the plan for SHC (emphisis on the "Holding" portion of that name). The retail may still survive but it will be smaller (less physical stores) or maybe a specialized store (Diehard Auto, mattress and appliance store). Lets just say that Eddie decides to go with Mattress and Appliance store concept. So he would take the stores SHC owns and transfer them to another entity so they can be used in the future (this is Seritage).

Now some of the Seritage stores will be remodeled and leased to higher tenants than Sears. Some will be redeveloped into other uses (apartments, office space etc.) to be rented or sold. Others will be made into Mattress and Appliance stores. Now, with the new Mattress and Appliance store you will need delivery and service. Lo and behold SHC already has that in Invotel and A&E. But what about credit for people to buy the mattress and appliances? Lo and behold, SHC has SYW and 5321 Master Card.

How about if they went the Diehard Auto way? Lo and behold, they also have a stake in AutoNation.

SHC also has a reinsurance company, a franchise company (Sears Outlet and Home), business where they can get royalties without spending money (Craftsman, Kenmore, DIehard) (Now these deals may make more sense), they have a stake in Lands End, Monark premium appliances, and Wally home for the connected home ideas.

SHC is more than just Sears or Kmart. It is a company that can make money in many different areas and can "transform" into something other than a retailer. Sears and Kmart may survive in a much smaller way (maybe a few hundred stores) or they can go away, or SHC can sell or get royalties on the name. The skies the limit on what it may become.

Bumped from another thread for really good explanation. OP is @OZj257U-1ixz.

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Post ID: @OP+P1CvOOk

9 replies (most recent on top)

2 years later and OP was mostly correct, although Holdings is on its last legs (Transform brought everything off) and the Appliances and Mattresses stores are being converted into Home & Life and new Home & Life stores are being built (a 4th one was leaked weeks ago on store locator that is across the street from a former Sears) Transform is now buying back SHOS and SHOS is still opening new stores (and closing some) and full line Sears store base is smaller now, but it survived in 2019 when everyone else thought it would die in 2017. Eddie still has a large stake in Land's End even though LE is pulling out of Sears locations. Citi agreement with Sears is still going on.

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Post ID: @brejt+P1CvOOk

1ilm- Do a little research and you will see that Buffett has said that the worst investment of his life was Berkshire-Hathaway. It is what he did with Berkshire after that pertains to this situation.

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Post ID: @1hcb+P1CvOOk

lilm - check yourself... no assets left? like the more than 350 stores they still own? They sold like 10 this year, plenty left. Not to mention brands (almost pure margin) and service businesses (higher margin than retail).

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Post ID: @1eil+P1CvOOk

Sure, and because I'm the same height as Brad Pitt I'm going to be a movie star. Buffet had consistent growth through smart deal making and his own special brilliance. Sears has no assets left, and a complete lack of leadership and business skills at the top of the house. There is absolutely nothing to this comparison beyond wishful thinking.

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Post ID: @1ilm+P1CvOOk

@awz, you sound just like the horse and buggy makers.

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Post ID: @1bck+P1CvOOk

Its the same idea that Warren Buffett had when he bought Berkshire Hathaway. Berkshire was a textile company that Warren bought and split up into different companies and used that money to buy other companies. Berkshire is also a "Holding" companhy

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Post ID: @1kwc+P1CvOOk

However Sears Holdings transforms itself, for their sake they should change their name, as they have totally trashed the once good name of Sears.

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Post ID: @1zfx+P1CvOOk

This is as good an analysis as I have seen of the situation. The upper echelons will not state this "vision" because employee morale is already close to its nadir. Almost every customer I speak to (in HA) asks "So when is Sears going out of business?" Cold comfort for the thousands that will be out of work that the Sears legacy will live on to compete in a new "transformational" economy.

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Post ID: @awz+P1CvOOk

I agree with you v00k. This Seeking Alpha says more or less the same.

https://seekingalpha.com/article/4094199-sears-holdings-esl-investments-berkshire-hathaway-broad-daylight

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Post ID: @ciu+P1CvOOk

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