Sears is on its way through bankruptcy court after years of losses and store closures – but at the same time, it looks like Toys “R” Us is making a comeback.
The Wall Street Journal reported that Sears has hired advisers to prepare for bankruptcy and that the once-largest retailer is poised to pay back all the $143 million in debt it owes. The company’s CEO, Eddie Lampert, has been bailing it out for years – he owns 31 percent of Sears’ stock, while his hedge fund, ESL Investments, owns 19 percent.
“There was a time when Sears was the Amazon of its day. “R”emarkably innovative, daring, diverse in strategy and deadly as a competitor,” retail expert Doug Stephens wrote on Twitter.
But Lampert, who thought he could turn around Sears and Kmart, chose to cut costs by slashing employees. One former vice president told Business Insider, “He refuses to put a dime in updating stores.” “R”ather than updating stores, he focused the company’s efforts into a confusing and complex discount program that ended up only angering customers.
And then the high-level executives started to leave.
“There are so many people running for the door not just because the ship is sinking, but because the captain of the ship is screaming at them, blaming it on them, and telling them it’s their fault,” one former vice president told Business Insider in January 2017.
While all this is happening at Sears, experts say that Toys “R” Us, which filed for bankruptcy over a year ago and officially closed in June, may be ready for a comeback. The company was going to auction off the rights to its name (as well as the Babies “R” Us brand), but the company’s owners cancelled the auction. Under a new plan, the company said, they’d “create new, domestic, retail operating businesses under the Toys “R” Us and Babies “R” Us names, as well as expand its international presence and further develop its private brands business.”
What Do You Think?
Will you miss Sears the way people missed Toys “R” Us? Have you even shopped at a Sears location recently? I’d love to hear your thoughts, so please feel free to share them on my Facebook page or on Twitter.