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Former Sears executive says it is time for struggling retailer to liquidate now

"Stop the insanity," is the advice that former Sears executive Steven Dennis is giving the struggling, money-bleeding retailer. Dennis advises that this action should happen immediately before it is too late, CNBC reported yesterday.

A man walks out of a Sears store on December 27, 2011 in Milford, Connecticut. Sears Holdings Corp has announced that it plans to close between 100 and 120 Sears and Kmart stores following poor sales during the holidays.
Photo by Spencer Platt/Getty Images

In a commentary on his blog last week, Dennis, a former vice president at Sears who exited the company in 2003 after about a decade, listed five reasons why the company should "stop the charade and embrace the inevitable."

In other words, Dennis is advising Eddie Lampert to surrender. Dennis says the liquidation is already underway, "referring to Sears as the world’s slowest liquidation sale." It is clear that Dennis is not a fan of Lampert an apparently, for good reason. Dennis argues that Lampert "doesn't know what he is doing," and is investing in the wrong areas, such as the highly touted "Shop Your Way" loyalty program.

The problem is it is only highly touted by Eddie Lampert and his executives at Sears.

Here are the 5 reasons that Dennis gives for Sears to throw in the towel, and to throw it in soon:

  • No value proposition. No reason for being.
  • The competitive gap continues to widen.
  • Digging a deeper hole.
  • A leader who is either a liar or delusional.
  • Valuable assets get less valuable every day.

Dennis points the finger at one person only. You guessed it: Eddie Lampert. Dennis says, "Lampert has still failed to articulate a vision of why and how Sears will fight and win in the intensively competitive mid-market sector."

In every major product category Sears has lost relevance (and market share) while key competitors continue to improve.

For Sears to be a successful omni-channel retailer their core physical stores have to be compelling. Sears has under-invested in their brick and mortar stores for years.

The most damning reason Dennis gives for immediate liquidation is that "Lampert doesn’t know what he is doing. After 28 straight quarters of declining sales (and heavy losses), Dennis says that Lampert "has the chutzpah to assert, among other things, that Sears is investing in where retail will be in the future."

"Shop Your Way" rewards program. Dennis asserts that Lampert's contention that "Sears can compete effectively with Amazon," is not based in reality. "Whether he really believes any of this is, or is merely spinning the story to buy time, remains an open question. But regardless of whether he is being disingenuous or whether he is nuts, you’d be crazy to give him your money," says Dennis.

But the final point he makes is the most damning of all, and it appears that Dennis is correct that "Valuable assets get less valuable every day."




Three truly valuable brands names that are losing their meaning in the marketplace by the day. Says Dennis, "There are pockets of meaningful value within Sears Holdings. But proprietary brands like Craftsman, Kenmore and Diehard are not sold where the majority of customers wish to buy them."

Added Dennis, "Ultimately the brands are only as good as their distribution channels. Simply stated, as Sears and Kmart continue to weaken, so do the value of these brands."

Sears must act quickly, or these brands will become as worthless as the Sears name.


CNBC - Former Sears exec calls for retailer to liquidate

Seeking Alpha - Analysis: Sears should liquidate while it can

Steven P. Dennis blog

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