According to Eddie Lampert, CEO and Chairman of Sears Holdings, the company is in the middle of a “transformation” into a profitable enterprise that integrates online and offline retail. Yet everyone from former high-ranking executives to anyone who has ever set foot in a Kmart says the retailer is in an inescapable death spiral.
Over at Business Insider, Hayley Peterson, who has closely followed the company’s woes, talked to current and former employees who worked everywhere from the checkout to the executive suite to learn more about what’s going wrong at Sears Holdings. The answer: a lot.
1. Eddie Lampert remains convinced of his vision for the company, which includes a “pathway to profitability” and an ongoing “transformation,” but no one else is. “No one believes in Eddie’s vision. He has just gone rogue,” a former vice-president said. Lampert still talks about this vision even to senior executives, so he may actually believe that it’s true.
2. Lampert may have his vision, but he also has set up the business so he has a financial fallback if the company does fail. He lends Sears Holdings money, but it’s backed by company real estate that he gets instead if the loans aren’t repaid.
3. Former executives told Business Insider that they would joke about going to see the Wizard of Oz before heading upstairs to tense video conference meetings with Lampert, who only visits the Sears Holdings campus maybe once a year.
4. It’s not just in the company’s materials for customers and the press that the words “customer” and “consumer” seem to be banned: a former Sears executive told Business Insider that two employees presenting to Lampert were told to avoid certain words, one of which was “consumer.” At Sears, shoppers are called “members,” whether they belong to the Shop Your Way rewards program or not.
5. Shop Your Way was supposed to be the salvation of the company, but there’s a problem with that: Kmart and Sears shoppers tend to be older and less interested in shopping online. During an early push to get all customers signed up, the signup process for the program took up so much time during checkout that shoppers waiting in line would simply walk away from their carts.
6. There’s a poster who goes by Eli Wexler who asks questions about products on the Shop Your Way platform’s social media component, asking about everything from boxing gloves to purses. This is reportedly a pseudonym for Lampert.
7. Contributing to the death spiral is the company’s lack of investment in stores and staff: if a store looks terrible and you can’t find anyone to help you, you aren’t going to spend any money there.
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