Sears held its annual meeting this week, and demonstrated that nothing insures failure like Lock-in to a failed Success Formula. (See coverage in New York Times and Chicago Tribune.) Sales are down, store concepts are failing and the Chairman said he has "no grand solution" as he hopes a "back-to-basics" program can revitalize sales. After all, the Chairman said he was "comfortable with ambiguity."
Chairman Lampert asked "A plane goes from 40,000 feet to 10,000 feet. Is that a good thing or a bad thing?" Well, the CEO said "No one likes double-digit sales declines.." Double-digit sales declines for consecutive years – hey – that’s what we would call a "free fall," and that’s a bad thing Mr. Lampert. You don’t have to be a billionaire hedge fund manager to figure out that one. Growth is your jet fuel – and you ain’t got any!
Sears stands in the middle of the ring, while in one corner is WalMart and the other is Target. Here’s a question for you Mr. Lampert, can you spell "punching bag?"
Not even Sears’ own subsidiary, Sears Canada, will agree to be bought out by the parent. And the convicted Martha Stewart has refused to let her goods be sold in Sears stores. If that isn’t repudiation…..
While the execs follow their old Success Formulas, the losers are employees and vendors. While taking their pay packages, and paying out multi-million dollar severances to former Chairman Lacy and other departing execs, they have gutted the corporate staff. They’ve laid off thousands in stores as they shut them down. And turnover of Sears managers was 35% last year (25% at Kmart) as Mr. Lampert blamed the troubles on his front-line managers and began kicking them out the door.
Sears is in the Whirlpool. "Pride goes before the fall" according to Proverbs, and there’s nothing but pride in Sears’ executive suite. Too bad they were unwilling to use White Space to find a new competitive opportunity for Sears. But that would have meant Disrupting their Lock-in, and that’s the one thing they’ve promised they won’t do.