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November 17, 2004

The End is Nigh

Bloomberg is reporting that K-Mart has bought Sears, Roebuck & Co.

This frightens me. Sears has always sold good, quality products at reasonable prices with great service. From clothing to housewares to tool (Craftsman = love), they've had a good, strong product line.

Now K-Mart has to go and sully it all up with their low-budget crap products that fall apart the first time you use them.

Maybe it's just an Arizona thing, but all the K-Marts around here became absolute hell-holes around the 90s, falling to the bottom rung of shopping. The stores were in constant disarray, they smelled funny, the shoppers didn't bathe (hence the stores smelling funny), the employees were disgruntled and the managers were asses... K-Mart was the kind of store where you didn't actually want to touch anything lest it contaminate you.

And with the bankruptcy and subsequent closing of all the Valley's K-Mart stores, Wal-mart has assumed the resplendent throne of "unbathed illegal immigrant shopping land." Which is scary, because I can remember when Wal-mart was brand new, well-lit, most of its shoppers spoke English, and it didn't smell like stale popcorn, B.O., and piss.

Which brings to mind a fascinating question: where the hell did K-Mart Holdings get $11 billion dollars to buy Sears? Was the K-Mart stores' financial disarray independent from their holding company? If so, why didn't the holding company bail them out? Or did this money the result of rumored investments from Rosie O and Martha?

Perhaps the most frightening part of those whole business isn't that K-Mart is buying Sears, but that K-Mart's CEO will now be the CEO of Sears. They may both be retailers, but they're going after different parts of the market. K-Mart has the "shower curtains that cannot get wet" (seriously, I've got one. The grommets rusted by the end of the first week, and they're now flaking off in orange chunks which quite-fetchingly match the unstoppable mildew my Chinese-sweatshop-made creation hosts) market cornered, while Sears has the "satisfaction guaranteed" and "indestructible tools warranteed for life" markets.

The market has shown us time and time again that things don't usually go well when an executive tries to run a company in a segment where he has no experience. Apple Computer being run by a Pepsi exec in the 90s comes to mind, just because they're so dichotomous and the company hemorrhaged money so rapidly.

I fear for Sears. If this doesn't end badly, kudos to the new holding company overlords. But I'm not holding my breath for any miracles.

Posted by Colin at November 17, 2004 8:19 AM

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