retail news in context, analysis with attitude

The Columbia Business Journal has an interview with Mark Cohen, once the chief marketing officer/president of softlines for Sears and chairman/CEO of Sears Canada, who “became a vocal opponent of new leadership that merged Sears with Kmart in 2005 and launched a campaign of cost cutting.”

Now teaching MBA classes at Columbia University, Cohen is eviscerating in his assessment of Sears’ management, at one point referring to the “short-sighted stupidity that financial-based executives with no bigger sense of their responsibility make, to the eventual detriment of the organizations they lead.”

Cohen also suggests that “Sears Roebuck lost its forward momentum. It had powerful brand opportunities by virtue of Kenmore and Craftsman, and to a lesser extend Diehard. And these brands just stopped dead in the water because the product development efforts and the marketing investments in those brands were whittled down” by management “who saw in them opportunities to save money rather than expand volume and market share.”

One more excerpt from Cohen’s comments:

“Retail, not unlike any industry you can think of, lives and dies based on its leadership. There are technology companies that live on the basis of patents and proprietary ideas, but at the end of the day a retailer lives and dies on the manner in which it assembles products and services that its customers will seek out, and does it in the context of an enterprise that is efficient and successful. In a large organization as Sears once was, this is a management challenge of enormous consequence, and it all boils down to leadership.”

Which it didn’t have.

You can read the entire piece here.

In a related story, CNN reports that a committee of Sears’ unsecured creditors “said in a court filing Friday that the company's plans to stay in business during bankruptcy are ‘nothing more than wishful thinking’ and ‘an unjustified and foolhardy gamble with other people's money’.”

The story notes that “the objections of the committee could be an important turning point in Sears' battle to stay in business. The court has an obligation to protect creditors in a bankruptcy case, and a judge can approve a company's plans to stay in business only if convinced that will be the best way to repay money that the company owes.”
KC's View: