Eddie Lampert as the White Knight riding in to save the day at Sears has to be one of the most absurd – not to mention ironic – images in business today.
Depending on the agonizingly complex legal twists and turns in bankruptcy court, Lampert appears likely to move back into the corner office at the company’s Hoffman Mistakes, Illinois, headquarters after agreeing to buy some remaining portion of the barely breathing retailer officially known as Sears Holdings.
The insanity of this situation is not lost on the company’s creditors, who are threatening to sue if it happens, but it appears that Lampert will one way or another be handed back the keys to the asylum.
A compelling part of the reasoning for this decision appears to be his claim that he will save an enormous number of jobs that would otherwise be eliminated should those horrible liquidators have their way.
Most reports use the 50,000 figure for the number of jobs that will be maintained thanks to Lampert’s selfless actions. Some take that down a few notches and suggest the final number will be closer to 45,000. A few say it’s 40,000, all based on Lampert keeping open 450 store locations out of the 700 that existed when Sears filed for bankruptcy late last year.
And this is where the logic starts to get a little fuzzy. Exactly how Lampert, who has proved time and time again how brilliant he is with manipulating mathematics (not to mention reality), has come up with this number should be greeted with a dubious reception at the very least.
Let’s take the middle ground and assume the 45,000 figure is accurate. Then let’s do the math.
Vendors who still sell to Sears and have been to the company’s ghost-like headquarters complex outside Chicago say they estimate there are no more than 1,000 people working there in space that once housed at least three to four times that many senior executives, merchants, operations personnel and other corporate types.
Let’s then make a very generous assumption that there are another 4,000 Sears employees scattered about the rest of the country, in distribution centers, warehouses, regional offices, service and repair departments and perhaps off-site IT or logistics operations.
That leaves 40,000 employees who will work in the company’s remaining 450 Sears and Kmart stores. A few taps on your handy calculator, and that works out to about 90 people at each store.
Have you been in a Sears or Kmart store recently? If you have and have seen more than a dozen people working at any given time, you may want to get your vision checked at one of the few remaining Sears Optical Centers. Even factoring in cashiers, stockroom kids and multiple shifts, it is very hard to get anywhere near that 90 headcount per store.
And all of this assumes Lampert will keep 450 stores open for any period of time; most analysts are projecting that no more than 250 will survive the first post-bankruptcy cuts.
There are so many reasons to question the court’s decision to let Lampert have a go at it again: financial, strategic and analytic—not to mention moral. But to this list, you can add the fact that the employment projections are every bit as dubious as all the other statements Lampert has made over the past decade and a half.
Or maybe just as Eddie Lampert has always touted that he has found a new form of retailing, perhaps the same can be said about his coming up with a new system of mathematics. The premises are equally plausible.
https://www.forbes.com/sites/warrenshoulberg/2019/01/21/saving-sears-jobs-the-new-math-according-to-eddie-lampert/amp/