This is a sad way for a great institution to go…But, as the article points out, Sears’ woes began long before Amazon came in dominate retail.
Sears is Now a Penny Stock
Sears stock has fallen into the bargain bin.
In the latest indignity for a once-grand retailer, the share price fell below $1 on Friday for the first time in the company’s history, dropping as much as 15% to 85 cents in midday trading.
Falling into loose-change territory is more than embarrassing. Nasdaq, the exchange where Sears stock trades, could delist the company. That’s a long process and would happen next year at the earliest.
Shares of Sears Holdings had already plunged 88% in the past year. They took another blow Monday, when CEO and primary shareholder Eddie Lampert warned the board that the company was running out of time and cash. He said Sears must restructure and cut its debt “without delay.”
Lampert pointed to a $134 million debt payment due on October 15, and said the company must demonstrate to lenders by Monday that it has required levels of cash in reserve, which could itself prove difficult.
Sears’ market value has fallen to less than $100 million. Lampert recently offered to buy the Kenmore appliance line through his hedge fund for $400 million, suggesting that the Kenmore brand on its own is worth more than four times as much as the whole company.
All of which is a stunning reversal for a company that was once not only the nation’s largest retailer, but also its largest employer.
In its heyday, Sears was both the Walmart and Amazon of its time. In the late 19th century and early decades of the 20th century, many Americans bought mass-produced goods for the first time through the Sears catalog. Most lived on farms and in small towns, and had previously made many of the goods they needed, such as clothes and furniture, themselves.
Sears stores helped reshape America itself, drawing shoppers away from traditional Main Street merchants and into malls, contributing to the suburbanization of the country after World War II. And its appliances introduced many American homes to labor-saving devices that changed family dynamics.
But long before the rise of Amazon and online shopping, Sears struggled to keep up with changing shopping habits. Read More