I've been oddly fascinated by the joint train wreck of two businesses that were once among America's top retailers — Sears and Kmart. In 2008, Sears CEO Eddie Lampert decided to rearrange the two companies with a plan, supposedly based on principles stated by Ayn Rand which would lead to new successes and huge profits. Had this worked, we'd be hearing how every business should be run that way but it has not worked. In fact, it's hard to see how it could have worked worse.
If you'd put a Magic 8 Ball in charge of those two companies and just asked it questions and did whatever it told you, Sears and Kmart would probably not be in much worse shape than they are today. I'll go a step further: If they'd put me in charge and I'd made decisions by flipping a coin, the companies might be in better shape. I'd have been right around 50% of the time and that would have been way ahead of the alleged experts here. According to CNBC…
Sears Holdings has contacted banks in recent days to arrange the financing necessary to file for bankruptcy after 125 years in business, people familiar with the situation told CNBC. The stock plummeted 32 percent, to 40 cents a share, in Wednesday's premarket trading after the report.
The so-called "debtor-in-possession" loan, which companies need to have enough liquidity to keep running the business during bankruptcy, is the clearest sign yet that the department store chain may finally file after years of losses. Sears has a $134 million debt payment due Monday that it previously said it may not be able to cover.
And they just announced the closure of 142 more stores. I could have done that. I could run any company so poorly that its retail outlets would keep going out of business. Piece o' cake.
This is not an "I told you so" and I hope there's no trace of glee in this news even though I am having a bit of fun at their expense. I think it's horrible that all these stores are closing and taking the jobs of thousands of workers with them. And of course underscoring this is my ever-growing amazement at how much damage is done in this world by folks applying (or in many cases, misapplying) the teachings of Ayn Rand.