Scorched Earth Capitalism: Eddie Lampert and the Last Strip-Mining of Sears: 2017–2018

[Seth Walsh]

“We don’t need more customers. We have all the customers we could possibly want.”
Lampert reportedly said this at a Sears shareholder meeting in 2017. It is insane because Sears was bleeding relevance, stores were deteriorating, and the customer base was shrinking.
while:

• stores were empty
• customer experience collapsing
• market share evaporating
• Amazon/Walmart eating retail alive
• stores visibly decaying

…signals something chilling:


the operating business was no longer the true priority.


A healthy retailer thinks:

• grow customers
• improve stores
• improve service
• reinvest
• defend relevance

That quote implies:

• customer growth no longer mattered
• preserving capital/assets mattered more
• the business was already mentally written off

That’s why people view it as brutal.


It sounds like:

“The organism itself no longer matters to me.”

The “carcass with financeable organs” idea comes from this.


Meaning:
instead of treating Sears as:

• a living retailer

it was increasingly treated as:

• real estate
• brands
• debt capacity
• financial optionality
• monetizable assets

The stores/employees/customers became secondary to the balance sheet.

Why this range:

• Sears was already weakened, but not yet fully dead.
• Lampert was CEO, chairman, largest shareholder, and major creditor.
• Sears entered Chapter 11 bankruptcy on 15 October 2018.
• ESL had lent Sears billions; reports estimated Sears paid ESL large annual interest/origination economics.
• Asset sales/spinoffs included Sears Canada, Lands’ End, Seritage real estate, Craftsman/Kenmore-type monetization.
• Critics alleged the operating company was hollowed while Lampert/ESL sat on multiple sides of the capital structure.

The brutal thesis:


Lampert treated Sears less like a retailer to save and more like a carcass with financeable organs: real estate, brands, debt claims, secured lending, spinoffs, and bankruptcy optionality.


That is the scorched-earth template:

• own equity
• become creditor
• lend against the corpse
• collect interest/fees
• monetize assets
• underinvest in the operating organism
• let labour/customer experience decay
• emerge with optionality after bankruptcy

 

[Seth Walsh]

Not even in the top 5 most brutal capitalists of all time.

But this era was his apex peak. It's up there with the worst.

 

[nigHT.143]

bbbbb

 

[AverageCurryEnjoyer]

so just cut loses and come out with as much as you can for the next opportunity. sounds like your strategy irl

 

[yyk117]

bump

 

[KeepCopingLads]

View attachment 5040015

“We don’t need more customers. We have all the customers we could possibly want.”
Lampert reportedly said this at a Sears shareholder meeting in 2017. It is insane because Sears was bleeding relevance, stores were deteriorating, and the customer base was shrinking.
while:

• stores were empty
• customer experience collapsing
• market share evaporating
• Amazon/Walmart eating retail alive
• stores visibly decaying

…signals something chilling:


the operating business was no longer the true priority.


A healthy retailer thinks:

• grow customers
• improve stores
• improve service
• reinvest
• defend relevance

That quote implies:

• customer growth no longer mattered
• preserving capital/assets mattered more
• the business was already mentally written off

That’s why people view it as brutal.


It sounds like:




The “carcass with financeable organs” idea comes from this.


Meaning:
instead of treating Sears as:

• a living retailer

it was increasingly treated as:

• real estate
• brands
• debt capacity
• financial optionality
• monetizable assets

The stores/employees/customers became secondary to the balance sheet.

View attachment 5040026

Why this range:

• Sears was already weakened, but not yet fully dead.
• Lampert was CEO, chairman, largest shareholder, and major creditor.
• Sears entered Chapter 11 bankruptcy on 15 October 2018.
• ESL had lent Sears billions; reports estimated Sears paid ESL large annual interest/origination economics.
• Asset sales/spinoffs included Sears Canada, Lands’ End, Seritage real estate, Craftsman/Kenmore-type monetization.
• Critics alleged the operating company was hollowed while Lampert/ESL sat on multiple sides of the capital structure.

The brutal thesis:


Lampert treated Sears less like a retailer to save and more like a carcass with financeable organs: real estate, brands, debt claims, secured lending, spinoffs, and bankruptcy optionality.


That is the scorched-earth template:

• own equity
• become creditor
• lend against the corpse
• collect interest/fees
• monetize assets
• underinvest in the operating organism
• let labour/customer experience decay
• emerge with optionality after bankruptcy

View attachment 5040033

so prioritised survival over growth

 

[Seth Walsh]

so prioritised survival over growth

brutal

 

[a2smael]

interesting

 

[Seth Walsh]

interesting

"We don't need more customers" While he was treating the operational labour layer as a carcass to be financialized. Loans against his own business he should be interested in "saving"; knowing the whole time everything would fail, and he would make off with $6b. So many jobs lost, so many families ruined, so many lives destroyed.

All knowingly, all by this guy's will to maximize personal enrichment at any cost (to others)

 

[Mochi Force 15]

"We don't need more customers" While he was treating the operational labour layer as a carcass to be financialized. Loans against his own business he should be interested in "saving"; knowing the whole time everything would fail, and he would make off with $6b. So many jobs lost, so many families ruined, so many lives destroyed.

All knowingly, all by this guy's will to maximize personal enrichment at any cost (to others)

the american dream!