# The decline of Sears Holdings

#### nsaspook

Joined Aug 27, 2009
9,097

#### spinnaker

Joined Oct 29, 2009
7,835
Probably the most iconic company in the country, if no the world.

And they got their mitts on K-mart and dragged them under with them. What a shame.

#### GopherT

Joined Nov 23, 2012
8,012
I think they closed some K-Marts here before that list was made.

I saw the writing on the wall for Sears when Ace Hardware started using the Craftsman name.

Also:
Sears had to sell the Craftsman name to keep the lights on.
When Sears moved hand-tool manufacturing from Emerson in Pittsburgh to China, processing lifetime warranty claims cost them more than the savings. Shortly after that, the sales declined - appliance sales declined (Kenmore) and now they are ready to fall off the face of the earth.

A former Emerson employee here in Pittsburgh showed me the difference between the Chinese made products and the older Emerson made sockets, wrenches, screwdrivers. The plating is terrible and irregular and so thick in some places that the socket didn't fit a standard 1/4" nut. Screwdrivers not fitting screws.

He was just sick about MBAs making decisions in cost without understanding the desires/needs of their customers and not setting any quality specifications and now the customers are unhappy, the company (sears) is going downhill (almost dead) and 700 people in Norther Pittsburgh suburbs were put out on the street for a while (most are now working at Mitsubishi Electric, Emerson Electric, and Siemens). Ultimately, no cost savings, no market share increase and no Sears.

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#### shortbus

Joined Sep 30, 2009
9,066
Sears was 'Amazon' before 'Amazon'.

#### tcmtech

Joined Nov 4, 2013
2,867
I saw the writing on the wall for Sears when Ace Hardware started using the Craftsman name.

#### tranzz4md

Joined Apr 10, 2015
310
Strantor's post really tells the tale, and it's simple.

People without applicable experience, knowledge, or credibility inevitably must learn from failures too. They are foolishly or carelessly put into positions they are not at all suited for, and also carry responsibility far beyond their capacities. The classic "owner's son" story is applicable far and wide. Just another disinterested party who should never be allowed access to the valuables.

#### #12

Joined Nov 30, 2010
18,223
I worked at Sears in 1970. People there said I was sitting on a gold mine. I would be rich when I retired.
Then they hired a new guy that worked right beside me and paid that beginner more than they paid me.
I asked why and was told, "He has a wife and child."
That was when I realized they weren't paying me what I was worth. They were paying me just enough to survive.
...and I quit.
Four years later I was earning four times as much money.
Every time I got 5 cents an hour for my annual raise, I quit again.
That's when I was sure that jumping ship always pays better than waiting for a raise, especially when you're young and learning quickly, and becoming more valuable quickly.

Now, it's retirement time and Sears looks like a bad bet for collecting my pension!

Joined Jan 15, 2015
6,324
A former Emerson employee here in Pittsburgh showed me the difference between the Chinese made products and the older Emerson made sockets, wrenches, screwdrivers. The plating is terrible and irregular and so thick in some places that the socket didn't fit a standard 1/4" nut. Screwdrivers not fitting screws.
Well the original tools were made with high quality case hardened steel but the Chinese tools are made using case hardened peanut butter so the quality suffers.

Ron

#### WBahn

Joined Mar 31, 2012
26,398
In comes this cancer born out of a university "think tank."
That's perhaps the most extreme story of this type I've ever heard, but I'd be willing to bet it isn't even close to the most extreme story out there!

Here's another one that will make you shake your head and wonder just how the government manages to ever get anything accomplished.

When I was in the service (hydraulics tech on fighter aircraft) we had the U.S. Air Force's last squadron of T-33 Thunderbird aircraft. Each aircraft had two brake master cylinders that were classified as XB3, meaning that they were considered non-repairable and disposable.

So whenever one would come into the shop, we would test it and if it failed we would order a new one from supply and through the old one in the recycling bin and send the new one out in its place. We didn't get these in often, but when we did we generally got a bunch of them. I suspect this is because they were pulled as part of a Phase Dock maintenance program cycle, but I don't know that for sure. Thus, about once a quarter, we would get a couple dozen in usually a few would fail. One time we had a dozen of them fail and so we ordered a dozen from supply. The only problem was that the guy that called in the order told them, "We need 12. Yeah, a dozen." But the person on the other end hadn't asked him to repeat how many we needed, he asked, "Unit?" meaning what is the unit of issue, but our guy thought he said, "Units?" asking him to confirm the unit of issue. So the order got entered as twelve dozen.

Now, normally we would get parts from supply delivered within about a half hour. But this time we got a call telling us that they didn't have enough to fill the order and were back ordering them. Fine. Several weeks went past and every time we would call and check on the status, they would tell us that they were still waiting on them. Eventually they delivered something like 106 of these brake master cylinders to us and informed us that, to the best of their knowledge, this represented the entire worldwide supply. Furthermore, since the last T-33 had been manufactured nearly thirty years prior and since the T-33 was already scheduled to be retired from service in another couple years, no more were being made and, therefore, they were closing out the order. The chief of the supply squadron accompanied the shipment to our shop to make sure that we understood that there would be no more of these parts available ever.

Slap your head #1: We always ordered these things in groups of maybe three to six. Even a dozen was an abnormally high order for us. So you would think someone would see an order for 12 dozen and look to see that base supply only attempted to stock about 20 at most and pick up the phone asking us to confirm the quantity. But, no.

So, naturally, our reaction was to return them to supply. Not only did we not have room for them, but they weren't on our list of authorized bench stock items and so we would get in trouble if we kept them. But because they were XB3, supply couldn't take them back because there was no way to return a non-repairable, disposable item back into the inventory. So the answer from the chief of the supply squadron? Just throw them away.

Slap your head #2: This was the very same guy that had just got done telling us that we had, in our possession, every known T-33 brake master cylinder in the world and that there would never be any others. Now he's telling us to just throw them in the trash because he can't do the paperwork to take them back.

But, at least back then, the saying, "Sometimes ya gotta do what what gotta do," was often the guiding principle. So we stuffed all of the remaining cylinders up above the bench stock room ceiling and whenever we needed one we would take one down and report it as FOB ("Found on Base") and then use it.

But a few months later we were up for our big inspection -- I think back then they called them UCIs (Unit Compliance Inspection) -- and one of the things the inspector is specifically tasked with doing is searching all of the nooks and crannies looking for unauthorzied tools, equipment, or parts. Naturally, above the ceiling tiles is one of the first places they look.

Slap your head #3: Our shop chief informed, quite unofficially, our squadron commander about the cylinders above our bench stock room and explained the situation to him. His response? Throw them away immediately as he won't stand for getting written up for contraband in one of his shops. He was more concerned about that than about the heat he would soon be catching when every other time a cylinder went bad the Air Force T-33 fleet was permanently reduced by one aircraft.

So, the night before the UCI team came through, our shop chief took the team leader out for dinner (we didn't know this until later). The next day, while all of us were sweating bullets, the team leader comes through the door and announces that they are going to do the contraband search first thing to get it out of the way. He then immediately grabs the ladder from their truck and personally checks the ceiling spaces for contraband. He removed a tile right next to our bench stock room, stuck his head up through the hole with his back to the stock room, looked forward, looked left, looked right, climbed down and announced that he saw no contraband in the ceiling spaces -- he was very careful to state that he saw no contraband, not that there wasn't any contraband.

A couple years later the remaining fleet of T-33's was sold to Mexico, along with all spare parts. But, once again, we couldn't get these master cylinders onto the manifests and the C-130 loadmasters were unwilling to let us just put them on anyway. So most of those T-33'smade the trip to their new homes with about half a dozen brake master cylinders strapped down to the rear seat. We told the guy in charge of taking possession of the fleet the tale and suggested that he, too, report them as FOB ("Found on Bird") once they got to Mexico.

Joined Jan 15, 2015
6,324
A couple years later the remaining fleet of T-33's was sold to Mexico, along with all spare parts. But, once again, we couldn't get these master cylinders onto the manifests and the C-130 loadmasters were unwilling to let us just put them on anyway. So most of those T-33'smade the trip to their new homes with about half a dozen brake master cylinders strapped down to the rear seat. We told the guy in charge of taking possession of the fleet the tale and suggested that he, too, report them as FOB ("Found on Bird") once they got to Mexico.
Great story has me recalling similar incidents. As a footnote:
The last operator of the T-33, the Bolivian Air Force, retired the type in July 2017, after 44 years of service.
Considering its birth and evolution the little airplane had a long career of service.

Ron

#### tcmtech

Joined Nov 4, 2013
2,867
Unfortunately that miseducation that all items not often used that are sitting on some shelf that serves no real purpose to anything else anymore in some building that has long since paid for itself is still a constant financial cost (when it's actually not) is what killed a huge amount of other wise good businesses over the years.

I can't count how many times I have been told that all of my 'old junk' inventory of odd things I keep on hand is costing me money yet the supposed financial management experts couldn't put a single dimes worth of real negative value to proving their claims.

My storage space is paid for and its cost of ownerships is the same empty or stuffed full.

Same with any item I keep in it. If it has been paid for it now is of zero further cost to have on hand no matter how long it sits. If anything as the average prices of my old obsolete items increase my standing inventory is going up in value not costing me money.

Then there's the cost analysis of actual storage space. Why throw out $100K in new old stock items to make space for$100K worth of new stuff when $10K will buy more than enough new storage space to hold the new$100K worth of stock and then some?

Seems pretty stupid to me to purposely throw away $100K of good slow selling, but still selling, inventory that's only going upon market value to avoid spending$10K on more storage space.

#### GopherT

Joined Nov 23, 2012
8,012
Then there's the cost analysis of actual storage space. Why throw out $100K in new old stock items to make space for$100K worth of new stuff when $10K will buy more than enough new storage space to hold the new$100K worth of stock and then some?
Because the business gets to write off the $100k in inventory as a loss if they discard the old inventory. Now, if you made$100k in profit off of new, active inventory and had to pay ~25% as taxes, I bet most people would decide to toss $100k 8n old inventory that they don't think they would ever sell in order to reduce that tax bill to zero. The additional saving would be that they wouldn't have to build another$10k worth of storage.

There are lots of ways to play this game. Even avoiding local asset taxes (inventory tax or real estate taxes). In many cases NOS sales cannot cover the taxes needed to cover the way local municipalities rate commercial/industrial spaces.

It seems stupid but not everyone can be a hoarder and that is a good thing for the last person to hold out and maintain their NOS inventory.

#### shortbus

Joined Sep 30, 2009
9,066
Well the original tools were made with high quality case hardened steel but the Chinese tools are made using case hardened peanut butter so the quality suffers.

Ron
I have to disagree with that. It may have been that way around 5 to 10 years ago, but not now. At least not from places like Harbor Freight. Their hand and power tools are of every bit of the same quality as the old Craftsman tools, some even better. And for stuff like sockets they have the same replacement guarantee. Don't know about other places quality though.

I always liked S-K for my sockets and ratchets. The last time I bought a complete inch and metric set. Many of the sockets have cracked. When I took them back to the place I bought them for replacement, they refused. S-K has a new policy that they don't reimburse the seller for warranted items, so sellers now don't exchange tools. Guess who will never buy S-K again?