On January 14th of 2017, Ringling Brothers Barnum & Bailey Circus announced they would fold the big top for the final time in May of that year. In a post about the announcement, I mentioned that the death spiral for Sears was playing out in a public way.
Earlier this week, on October 15th, Sears filed for Chapter 11 bankruptcy protection, more than 125 years after the company was founded by Richard Sears and Alvah Rosebuck. Their current CEO, Edward Lampert, stepped down immediately following the announcement. The retail chain also announced they would close 142 of their 687 locations before the end of 2018.
On April 19th of 2010, the stock price of Sears closed above $92. That same $92 would have brought you nearly 200 shares of Sears on Friday, with the stock closing at a mere $0.465. Even in the very first Wish Book printed in 1933, there’s very little that forty-six cents would buy.
For almost a century, Sears was considered invulnerable. But like many who sit at the top of their industries for long stretches of time, there’s little urgency to change and adapt. And by the time it becomes necessary, it’s usually too late. On the internet, as with most things, it happens even faster. It wasn’t long ago when 90% of all people on the web used Netscape Navigator as their browser.
Look around at the players dominating their markets today. Despite their current stature, not a single one of them is invulnerable. Starbucks, Wal-Mart, Amazon, Southwest Airlines, McDonalds, Google, and more. They’re all destined to be the next Sears or Kodak or Ringling Brothers or Toys ‘R Us without constant innovation and reinvention.
Which current market dominator do you think is the most vulnerable to extinction? Reply in the comments section below with who you think might fail, along with the reason(s) why.
Sears remains hopeful that bankruptcy protection and a $300M lifeline from Lampert’s hedge fund will be the magic elixir to heal the company, but all of this week’s announcements focused on old things Sears would no longer do. Like a lifelong smoker giving up cigarettes following a stage four lung cancer diagnosis, it keeps things from getting worse, but it’s not going to mend you. In the end, there’s nothing resembling a cure being prescribed at Sears. Hospice care may be all that’s left.
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