Private equity spent most of the 90’s destroying Montgomery Ward and Eddie Lampert held Sears/KMart under the water until the bubbles stopped so he could cry to anyone that would listen that the retail business was failing while he made a fortune selling off the company’s real estate.
Yup, they deliberately ran it into the ground. They took out loans against Kmart to buy Sears and sold Sears and Kmart properties off to give themselves money via stock buybacks.
And what’s worse, because it worked, you can see similar actions happening to other major retail outlets. Target, in particular, seems to be following directly in the footsteps of Kmart.
Private equity spent most of the 90’s destroying Montgomery Ward and Eddie Lampert held Sears/KMart under the water until the bubbles stopped so he could cry to anyone that would listen that the retail business was failing while he made a fortune selling off the company’s real estate.
Thanks for clearing the misconception. Are there any books on this you’d recommend?
Yup, they deliberately ran it into the ground. They took out loans against Kmart to buy Sears and sold Sears and Kmart properties off to give themselves money via stock buybacks.
And what’s worse, because it worked, you can see similar actions happening to other major retail outlets. Target, in particular, seems to be following directly in the footsteps of Kmart.