How do they do it? They have to be losing money left and right. There are barely any stores left. What will be the last store to close? A Kmart or a Sears?
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For the life of me I can't figure out why Sears and Kmart still exist to even this tiny degree in the year 2023. How can it possibly be worthwhile for Eddie to still be bothering with all this. I swear he's just trolling us all at this point.
Unfortunately Sears Parts Direct functions about as well as the rest of Sears. Parts aren't in stock. When they are they'll take your money then stonewall for 3 months about why there isn't an order confirmation. When you try to cancel your order the system is down. Finally after a year they'll tell you it's no longer available, and will spend another six months of back and forth before you get a refund. Meanwhile the customer bought a new refrigerator after waiting for two weeks.
I just got my order from Sears today, seems to me they’re doing very well.
One of my neighbors is an A&E guy in Southern California. He says they are having a lot of trouble getting parts. Many of the parts are COD. Also, he doesn't get as many service calls as he used to. He generally works only 2 -3 days a week. He says he's just waiting for the day when they close up shop.
A&E can't possibly be bringing in much money when they're constantly making the 10th trip to fall to repair an appliance because they can't get parts. The fleet is aging with all the costs that come with too. It's been shopped for a long time with no takers, and has little value beyond its customer list. The infrastructure and support that gave A&E value is long gone.
Royalties from craftsman sells, leasing and selling real-estate, A&E, and the offshore stores (especially Guam) make a ton of cash.
The company got rid of anything losing money. Transformco is likely profitable
What the he-l were Lampert and Berkowitz thinking when Sears was bleeding billions away in operations for years and years? It shows up on the income statement! The cash flows are clear! It isn't Monopoly money. Weren't these guys supposed to be value investors? It's like they weren't thinking at all! Anyone could have opened a small purse & accessories store right next to a Sears and made more money than the entire company did in ten years.
Wonder if Eddie liquidating asap mirrors Seritage's actions. A high interest rate greatly increases carrying costs on inventory, bonds, borrowing on margin, revolving credit etc. The timing on Seritage is especially odd since he dumped his position a third of lowered guidance of $18 per share. Keeping up with inflation counts as success in this environment and deleveraging at least contains potential losses. It could be a reaction to how plans for Sears real estate got derailed in the financial crisis as well.
Honestly the only thing keeping it afloat is Home Improvement and Parts Direct.
With the economy coming to a screeching halt, the Home Improvement division will be in trouble soon. As the person above said.. Many only learn cash discipline when they're nearly broke.
Unless the economy turns around things don't look very good.
Cutting operations cash burn by eliminating unprofitable operations. Moving from Hoffman to a small office while most work remote. Sears Home Services, Improvement and Parts Direct. Letting go of everyone not necessary to run the diminished company. Selling and leasing real estate. Royalties. Liquidating and collateralization of what Lampert owns to invest and keep things running.
Transform is now a start up funded by Lampert's comparatively meager assets and cash flow compared to the glory days. Many only learn cash discipline when they're nearly broke.