Speaking about the iconic retailer, which filed for Chapter 11 bankruptcy on Monday 15 October, Trump said Sears had been "a big deal" when he was young.

By Daniel Herborn


Posted on October 16, 2018

His comments were tinged with awkwardness, however, as his Treasury secretary Steven Mnuchin had been a board member at Sears between 2005 and 2016.

Before joining Sears, Mnuchin had been a director at K-Mart Corp, which Sears acquired in 2005.

“Sears has been dying for many years,” Trump told reporters at a White House press address. “It’s been obviously improperly run for many years and it’s a shame.”

Mnuchin’s ties with the company go back to college, where he roomed with Eddie Lampert, now Chairman of Sears.

In his role as Treasury Secretary, Mnuchin is part of the three-person board of the Pension Benefit Guaranty Corporation, which considers applications from ailing companies seeking to terminate their pension plans.

Democrat Senator Bob Menendez quizzed Mnuchin on his links to Sears during his confirmation hearing for the position. Mnuchin promised to recuse himself from the hearing if Sears ever made such an application but Menendez did not consider this satisfactory.

“I’m not sure that the remaining two (board members) can ultimately make a decision on such a case which involves 200,000 people’s pensions,” Menendez said.

The writing has long been on the wall for brick and mortar retailers like Sears

Chapter 11 bankruptcy postpones a company’s obligations to creditors, meaning it is technically possible for Sears to reorganise its business, possibly by selling off some of its debt or assets, and continue trading.

It plans to close 142 more stores by the end of 2018 and will begin liquidation sales shortly.

Meanwhile, its stock market value has fallen off a cliff since the disappointing merger with Kmart in 2005, plunging from US$8.4 billion to just US$36 million.

Lampert has stood down as CEO but will remain Chair. He continues to invest his own considerable wealth into the company. On 15 October, his company, ESL Investments, said it was trying to secure a US$300 million debtor-in-possession loan in addition to the US$300 million injection from investment banks it has already secured.

The general feeling, however, is that the retailer has been in decline since the 1980s, when Walmart overtook it as the biggest retailer in the US, and that it now has no viable route back to prosperity.

It is currently saddled with more than US$5 billion of debt and has already cut its staff to 90,000 people, down from 246,000 just five years ago. It has already sold off many of its real estate assets.

On 14 October, it failed to meet a US$134 million loan repayment that was due.

Sears had been known for its sprawling catalogues and giant inventory

Sears was a retail phenomenon in its day, Amazon before Amazon. Instead of finding a niche, it aimed to sell almost every imaginable item. More than any other retailer, it capitalised on the possibilities offered by the US Postal Service and set up a mail order business in 1893.

It outflanked local retailers by maintaining a much broader inventory. It also became known for its grandiose catalogues, which spanned thousands of pages and offered up to 100,000 items, with seemingly endless ranges of fashion, electronic equipment, sporting goods, guns, animals, toys, build-it-yourself homes and the latest gadgets.

100 years after its wildly successful entrance into the catalogue business, Sears got out of the business it had once mastered.

Just two years later, Amazon, the retailer whose business model would eventually obliterate it and many similar retailers, shipped its first book.