SEARS is KMART is SEARS.
KMART -- the once bankrupt retailer -- is buying
SEARS. Just weeks ago SEARS bought nearly a hundred KMART stores. I don't see how this merger helps either in their efforts to compete with Wal-Mart, Home Depot, Target, BABIESRUS, Amazon, COSTCO, and Lowes. What both retailers need is a radical change in: 1) business models; 2) corportate cultures; 3) advertising persona; and 4) inventory control technologies. Tell me how the merger does any of this and I'll tell you whether the merger will help KMART and SEARS survive the breakthrough innovations of their competitors. The thing to look at first -- can KMART and SEARS ever get in the game when it comes to competing with Wal-Mart in the all important area of
inventory control. See also
this. Quotable:
FORTUNE: One of the greatest management tools ever has to be Wal-Mart's Saturday-morning meeting, where companywide decisions can be executed in an instant. How does it work?
David Glass: The idea of it is very simple. Nothing very constructive happens in the office. Everybody else had gone to regional offices � Sears, Kmart, everybody � but we decided to send everybody from Bentonville out to the stores Monday through Thursday and bring them back Thursday night. On Friday morning we'd have our merchandise meetings. But on Saturday morning we'd have the sales for the week. And we'd have all the other information from people who'd been out in the field. They're telling us what the competitors are doing, and we get reports from people in the regions who had been traveling through the week. So we decide then what corrective action we want to take. And before noon on Saturday the regional manager was required to be hooked up by phone with all his district managers, giving them direction as to what we were going to do or change. By noon on Saturday we had all our corrections in place. Our competitors for the most part got their sales results on Monday for the week prior. Now, they're ten days behind, and we've already made the corrections.
UPDATE: Here's the
AP story on the buyout. Quotable:
The combined company under Wednesday's deal would be known as Sears Holdings Corp., but it was clearly orchestrated by Kmart chairman and Sears shareholder Edward Lampert, who will lead a new board that will be dominated by Kmart directors .. The new company will be headquartered in the northwestern Chicago suburb of Hoffman Estates, where Sears has its headquarters, but will maintain a "significant presence" in Troy, Mich., where Kmart is based. Lacy said he and Lampert have known each other four years and that the idea for a combined company first came under discussion when they were in talks about Sears' purchase of 50 Kmart stores earlier this year. Under Wednesday's agreement, which was unanimously approved by both companies' boards of directors, Kmart shareholders would receive one share of new Sears Holdings stock for each Kmart share. Sears, Roebuck shareholders can choose $50 in cash or half a share of Sears Holdings stock. That portion of the deal values Sears shares at $11 billion, a 10.6 percent premium over its value at Tuesday's close. The new 10-member Sears Holdings board would have seven members from Kmart and three from Sears. Lampert, Kmart's majority shareholder, is also Sears' largest shareholder, holding a 15 percent stake in Sears through his ESL Investments Inc.
Essentially it looks like Lambert is consolidating his retail holdings into a single firm, based out of Hoffman Estates, Illinois, i.e. SEARS headquarters.
Reading:
The Wal-Mart Decade: How a New Generation of Leaders Turned Sam Walton's Legacy into the World's #1 Company by Robert Slater
Conquering Complexity in Your Business: How Wal-Mart, Toyota, and Other Top Companies Are Breaking Through the Ceiling on Profits and Growth
by Michael George & Stephen Wilson
The Hard Road to the Softer Side : Lessons from the Transformation of SEARS
by Arthur Martinez
Kmart's Ten Deadly Sins: How Incompetence Tainted an American Icon by Marcia Layton Turner
On Target: How the World's Hottest Retailer Hit a Bullseye by Laura Rowley
Trading Up: The New American Luxury by Michael Silverstein & Neil Fiske
Big Change at Best Buy: Working Through Hypergrowth to Sustained Excellence by Elizabeth Gibson, Andy Billings
Built from Scratch : How a Couple of Regular Guys Grew The Home Depot from Nothing to $30 Billion by Bernie Marcus & Arthur Blank.
Sam Walton : Made In America by Sam Walton.
Posted by Greg Ransom
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