By Mark Wachtler
December 16, 2014. Hoffman Estates, IL. (ONN) The American icon known as Sears is in its death throes. The company is owned by a billionaire hedge fund manager whose claim to fame includes dismantling companies and selling them off in pieces. This century-old, beloved retailer is well on its way to seeing the same fate. But there’s still time to save Sears. This editorial is an idea from a lifelong, loyal Sears customer - buy American, sell American, believe in America, and transform the proudly American company into something like Amerimart, the anti-Walmart.
More and more Americans are seeking products “Made in the USA”. Image courtesy of AlphaGraphics.com.
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When Walmart burst onto the scene a couple decades ago, your author remembers the time well. I was one of few patriotic but demonized Americans urging everyone to ‘buy American and save American jobs’. For that, we were called “isolationists”, “protectionists”, “racists” and worse. But we were right. Walmart entered our towns with commercials and news articles touting the idea that the chain from Arkansas bought its products from small, local companies and even a few home businesses. They were investing in America and Americans returned the favor by investing in Walmart.
But like many things in this country these days, it was merely a cruel bait-and-switch tactic. Walmart was actually shutting down hundreds of thousands of American companies, destroying millions of American jobs, and sending them all to third world countries that even went so far as to use slave labor to produce low priced products. Today, most Americans have come to understand this. The chain has been banned by cities and towns across the country and its sales have been declining for the first time in its history. Unfortunately, today half of all Americans have a net worth of zero or less and Walmart is reluctantly their only choice. But someone could change that - Sears could change that.
The Motorola model
To show how passionate your author is about this subject and idea, the concept goes all the way back to 1976 when I was just 6 years old. For some bizarre reason, the controversy stirred up by Motorola in the homes of all Chicagoans in that year is one of my oldest and most curious memories. American companies had just begun packing up and moving overseas where labor was cheap, leaving millions of unemployed American workers in their wake. But Chicago-based Motorola made a stunning announcement.
The company wasn’t moving anything anywhere - not its corporate headquarters nor its factories. Instead, they settled in the Chicago suburb of Schaumburg, just down the street from Sears. Executives shocked the nation when they explained they were betting on America, not betraying it like most all the other large corporations. If that meant they had to sell their mobile communications equipment at a slightly higher price than their outsourcing competitors, so be it. They believed the American people would understand the country’s new dilemma and repay the company’s national loyalty with a loyalty of their own. And they did.
Reversing the demise
It’s no secret that Sears is on the verge of death and the company’s executives seem to be happily managing a nice, slow and profitable demise. But as the stock price continues to fall, it’s apparent the only ones profiting by the model of shutting down stores and selling off assets are the company’s executives. Sears’ owners - the stockholders - are losing money with this strategy.
It was only yesterday that Sears CEO Eddie Lampert published an open letter to the retailer’s employees, but also to investors and the American people. In it, the famous hedge fund manager compared his company to, “large, windowless buildings that once held essential - now useless - telephone equipment to make landlines work.” Large and useless - that’s how Sears’ own CEO views his own company. He should know. He and his predecessors made it that way. Fortunately, millions of Americans including this humble author, take a more reverent view of the historic icon.
In the most recent quarter, Sears (including K-Mart) saw its overall revenue fall another 13%. To save the company, CEO Lampert took out a $400 million short term loan from his own hedge fund. The retailer announced the closing of 235 stores this year alone. It’s selling most of its stake in Sears Canada. And it continues to sell off its most popular brands like it did with Lands’ End this year. Even to a lay-person like this author, it seems obvious that Sears’ long term strategy is to milk its ever-shrinking line-up of profitable stores to slowly populate its cyber mall with loyal online shoppers. Will it work? Sure. The company has billions of dollars in assets it won’t need and can sell off, including stores and real estate. But compared to what Sears is, was and could be again, no. The strategy is a dismal failure and a lazy sell out.
Instead of completely destroying shareholder value by being the modern day Gordon Gekko, not to mention hundreds of thousands of American jobs in the process, perhaps Mr. Lampert and his fellow executives could try saving Sears. And from a lifelong and passionate Sears customer, here’s how.
Buy American at Amerimart
For starters, it’s the concept that’s important here not the name. In fact, before readers Google the domain Amerimart.com is owned by an online retailer of women’s fashion called Amerimark. But imagine if you will a retail landscape where Americans have only two choices: job-killing mega-chains like Walmart or job-creating mega-chains like Sears’ Amerimart. Some say that day is all but here.
One example suggesting the idea’s time has come is from none other than ABC News’ Diane Sawyer. Once a decades-long cheerleader for outsourcing and the new global economy, producers at the popular show have switched sides and now regularly feature ongoing segments about manufacturers and retailers of American made products. My, how times have changed.
Consumer sentiment, insourcing, American jobs
The ‘buy American’ trend is so widespread today, the term ‘insourcing’ had to be created to name the current phenomenon. American companies that spent the past two decades shutting down American factories and stores are bringing their operations back home. Why? Because the American people are crying out for it. In business terminology, the demand outweighs the supply. It may have taken 20 years, but America has finally figured out the devastating effect of buying cheap foreign products over nearly equally priced, quality American-made products.
Just look at the controversy over the Chinese-made, USA Olympic uniforms a couple years ago. Notorious outsourcer Ralph Lauren, designer and manufacturer of the official US Olympic uniforms, had them made in China because he insisted there wasn’t a single garment factory left in America. America was outraged, factories opened, jobs were created and the USA Olympic uniforms are now made in America. When the media exposed government tourist attractions like the Smithsonian with lining its gift shop shelves with expensive, Chinese-made souvenirs, the American people were outraged. Factories were opened, Americans were hired and the government’s gift shops now sell American-made souvenirs at the same price or cheaper.
The moral of the above two stories - if you build it, they will come. We’re talking to you Eddie Lampert, CEO of Sears. Be the anti-Sam Walton. Build the anti-Walmart. Believe in America. And use your unique position and situation to go down in history as one of the men who helped save America.
From the editorial desk of the Illinois Herald.
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