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bigyack-com · 5 years

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Activists Build a Grass-Roots Alliance Against Amazon

SAN FRANCISCO — Amazon flourished over its first two decades with little opposition and less scrutiny. A new coalition and a report unveiled on Tuesday make clear that era is over.The coalition, Athena, comprises three dozen grass-roots groups involved in issues like digital surveillance, antitrust and working conditions in warehouses. The goal is to encourage and unify the resistance to Amazon that is now beginning to form.The report, from the Economic Roundtable, a nonprofit research group that focuses on social and economic issues in Southern California, delves into the largely unexplored topic of what Amazon is costing the communities where it has warehouses. The short answer: a lot.While the simultaneous arrival of Athena and the report are a coincidence, they are linked by their attempts to understand and ultimately influence Amazon’s push into almost every aspect of modern life. The internet conglomerate hired 97,000 employees over the summer, nearly the total employment of Google. The report is bluntly titled “Too Big to Govern.”“This is a company functioning at a scale that was previously left to government,” said Tom Perriello of the Open Society Foundations. Founded by the billionaire George Soros, Open Society is providing some of the seed funding for Athena. The coalition is raising $15 million to cover its first three years.“It has incredible impact,” Mr. Perriello said of Amazon. “Who could possibly shape its future and direction?”Amazon, like Facebook, Apple and Google, has drawn the attention of Washington regulators, state attorneys general and at least a few politicians in the last year. The central question being asked about all of the companies: When does a tech platform become too big and powerful, ultimately hurting the society it once dazzled? In Amazon’s case, the situation is particularly complicated. Its aspirations long ago exceeded online retail to encompass fresh groceries, devices that connect your home to the internet, front-door and neighborhood surveillance, professional services like plumbing and contracting, health care, government procurement, internet infrastructure and Hollywood entertainment. Just about everything, really. Amazon declined to comment for this article.Athena springs out of several unexpectedly successful grass-roots efforts to rein in Amazon’s power. Last fall, the retailer was forced to begin paying a $15 hourly minimum wage nationwide. In February, it abandoned plans to establish a new headquarters in New York after opponents mobilized against Amazon and the politicians who had approved the deal. This month, an attempt to stack the City Council in Seattle, the company’s hometown, with members more acceptable to Amazon backfired with voters. These setbacks could be attributed to many factors, but one of them was the influence of labor and immigrant organizations. Now some of those groups are joining together under Athena.“We’re learning from what makes Amazon back down, and looking to replicate that as much as possible with as many people as possible,” said Dania Rajendra, the Athena director.Athena will be run from New York, but the real work will be done out in the field where most of the member organizations are. They include the Awood Center, a Minneapolis nonprofit that has organized Amazon workers from East Africa; Warehouse Workers for Justice, which is based in Chicago; and Fight for the Future, a group that focuses on digital issues, in Massachusetts.In a separate move on Monday, Fight for the Future and other groups called on Congress to investigate Amazon’s surveillance products, including the Ring front-door monitor and Rekognition facial tracking software. The products threaten “our privacy and civil liberties, especially in brown and black communities,” the groups said.The effort against Amazon will not be easy, said Lauren Jacobs of the Partnership for Working Families, a coalition member in Oakland. Amazon is projected to have $238 billion in sales this year with 750,000 employees.“This is a David and Goliath story,” she said. “David took what he had and turned it into a winning strategy. We’re taking what we have — the voices of the members of our various organizations, our collective knowledge and experience and deep understanding of the economy around Big Tech, and the experience we’ve had with making this company shift its behavior — and trying to build a more humane economy.”Athena’s $15 million budget is modest for the scale of change it hopes to bring about . “This is grass-roots democracy,” said Barry Lynn of Open Markets Institute, a Washington think tank and coalition member focused on antitrust issues. “There’s no money in it. Just people.”Mr. Perriello of the Open Society Foundations said updating protest movements for the digital era was an interesting challenge.“Uncertainty is now baked into the model,” he said. “You don’t know where the fight is going to be two months from now or two years from now. So you need the ability to organize citizens of very different political stripes across geographies and across demographics, where traditionally you had to organize in place.”The name Athena is associated with democracy, freedom and wisdom. But it has another advantage for the coalition.“We didn’t want to have Amazon in the name — People Against Amazon or whatever — because part of the strategy is to offer a better vision for how the economy could work,” said Stacy Mitchell of the Institute for Local Self-Reliance, a nonprofit in Maine that opposes corporate concentration and advocates local community development. “To be for something, not just against.”Sheheryar Kaoosji of another coalition member, the Warehouse Worker Resource Center in Ontario, east of Los Angeles, said Athena was not planning a boycott of Amazon but more interested in trying to sway it — including its employees and customers.“Half the households in America have an Amazon Prime account,” Mr. Kaoosji said. “That gives them a huge amount of power to change the company.” His group is dedicated to improving conditions in what is sometimes called “the goods movement sector.” The resource center is in California’s Inland Empire, where the work gets done to process those packages that appear on porches in Santa Monica and Newport Beach as if by magic. Amazon workers and Amazon customers exist in two different worlds, the Economic Roundtable said. The report calculates that a little over half of Amazon warehouse workers in Southern California live in substandard housing. And for every $1 in wages, they receive 24 cents in public assistance.“Every day, ships, trucks, trains and airplanes bring an estimated 21,500 diesel truckloads of merchandise to 21 Amazon warehouses in the four-county region,” the Economic Roundtable report said. It calculated that Amazon trucks last year created $642 million in “uncompensated public costs” for noise, road wear, accidents and harmful emissions.Almost as an aside, the report indicated how adept Amazon, with a stock market value of nearly $900 billion, is at getting funding from California and local communities. This included $25 million from the California Film Commission to subsidize six productions, including the third season of “Sneaky Pete,” an Amazon crime drama, and $1.2 million from the California Office of Business and Economic Development toward an office building in Irvine for programmers.The report noted on its title page that it was underwritten by the Los Angeles County Federation of Labor, which represents more than 800,000 members of 300 unions. The Economic Roundtable said that did not affect the results. Among the report’s suggestions: that Amazon raise its minimum wage to $20 an hour, that it require its logistics subcontractors to do the same, that it provide child care at its warehouses and that it build affordable housing in its logistics communities.The report draws on California Public Records Act requests filed with communities with Amazon facilities. Many of them nevertheless came up empty. The report noted that very little of Amazon’s business was known to anyone but Amazon. Communities are in the dark.“Our conclusion is that it’s time for Amazon to come of age and pay its own way,” said Daniel Flaming, a co-author of the report. “This means paying its full costs to the communities that host it and the workers who create its profits.” Source link Read the full article

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morganbelarus · 5 years

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High-end retailer Barneys files for bankruptcy

New York (CNN Business)Barneys, an icon of America’s luxury clothing world for decades, has filed for bankruptcy.

“Like many in our industry, Barneys New York’s financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand,” Barneys CEO Daniella Vitale said in a statement.

The bankruptcy filing will allow the company “to conduct a sale process, review our current leases and optimize our operations,” she added.

The company said it will continue to operate five flagship locations in New York, Los Angeles, San Francisco and Boston, as well as Barneys.com and BarneysWarehouse.com. However, it said it is shutting down stores in Chicago, Las Vegas and Seattle.

The company is also shutting down five “concept stores” and seven of its nine Barneys Warehouse stores.

The move was not unexpected. Reuters reported last month that filing for bankruptcy protection could help alleviate the pressure of expensive leases.

The company traces its history to 1923, according to its website, when Barney Pressman pawned his wife’s engagement ring. The company indicated he used the funds to open a discount clothing store.

Barneys has several locations in the United States, but its headquarters and flagship store line the area around New York’s Fifth Avenue, which for months has been emptied of prominent luxury retailers as they flee high rents and shifting consumer tastes.

Barneys is just the latest traditional retailer to file for bankruptcy protection. Charlotte Russe filed for Chapter 11 in February. And in October, Sears — which was drowning in debt — filed for bankruptcy after 132 years.

Original Article : HERE ;

High-end retailer Barneys files for bankruptcy was originally posted by MetNews

#MetNews

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shirlleycoyle · 3 years

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‘Micro Grants’ Are Keeping Virginians Afloat While Waiting For Unemployment

Last month, Virginians who have gone months without receiving unemployment relief filed a federal class action lawsuit against the Virginia Employment Commission (VEC). According to a legal press release, the VEC is failing to respond to unemployed applicants for months at a time, leaving thousands of people unable to pay rent or feed their families during the COVID-19 pandemic. Weeks after the lawsuit was filed, a District Court Judge ordered the VEC to resolve over 92,000 unprocessed claims by Labor Day as part of a settlement.

Meanwhile, the government's foot-dragging has driven activists to take matters into their own hands. One Richmond-based grassroots organization called Mutual Aid Disaster Relief Richmond (MAD RVA), has created a “micro grant” system that is providing assistance while people wait for their claims to be resolved.

Through a grassroots fundraising drive that exceeded their expectations, the group was able to distribute over 1,000 $125 grants in 2020, for a total of $153,000. This year, they’ve given away $38,600 through $200 mini-grants to nearly 200 people and allocated $8,000 to help bail 40 people out of jail.

“We've gotten a lot of emails and texts back from people being really grateful and expressing that the grant has helped with a rent payment or with some groceries,” Tamanna Sohal, one of four members who formed the micro-grants program, told Motherboard. In return, some people have offered their own services, such as hair braiding.

A warehouse in Richmond, VA stocked with food and supplies. Photo by MAD RVA

Virginia currently ranks worst in the nation for processing unemployment claims, and the VEC has had its budget slashed by 40 percent since 2011. The number of unhoused people rose by more than 50 percent in Richmond last year, as people across the state struggled to make end's meet amidst the pandemic.

Plaintiff Lenita Gibson became homeless for about four months after VEC cut off her benefits. “I have no income now, other than food stamps,” Gibson said in a press statement. “I have a roof over my head again, for now, only through temporary assistance from rent relief programs. The financial loss has been tremendous, and emotionally you are just a wreck. It’s been horrible. Never in my wildest dreams did I think I’d be treated like this. It doesn’t make any sense.”

While many have expressed disbelief over the state’s unwillingness and inability to provide adequate aid, MAD RVA foresaw a struggle ahead. In March 2020, several members started a group chat to prepare a community response plan for the COVID-19 pandemic.

Sohal, who hadn’t previously been involved in many formal mutual aid efforts, got involved after a friend added her to the chat. “It was just people talking about how COVID is going to affect us locally,” said Sohal. “What sorts of resources we could see running out really easily. And then, at the same time, what are the resources that already exist in surplus for some people that really need to be redistributed?”

MAD RVA also runs a supply drive with free food, hygiene items and other vital goods. They started a call line for requests, and have been delivering about $5,000 worth of goods directly to family’s homes every week since mid-March.

After outgrowing their storage space within local cafes, the organization rented an enormous warehouse space, built a walk-in fridge, and started a farm to sustain the supply drive.They distribute free AC units and host community free stores—a bit like a garage sale, but one where everything is free.

“We’ve got everything you could possibly want,” collective member Jake told filmmaker Kyra Kilfeather in a documentary profiling MAD RVA’s work. “Toilet paper, cans, we have plenty of pasta…but in two or three days these shelves will be empty again.”

Several other community grant programs have surfaced in the sea of pandemic-inspired mutual aid groups. The Chicago Black Drag Council started raising $100 grants for BIPOC trans and gender non-conforming drag performers in Nov. 2020. Black Lives Matter Canada has raised $431,500 for thousands of $200 community microgrants for Black individuals. And the Jefferson County Anti-Racist Fund in Washington has been redistributing wealth from people who benefit from white privilege to BIPOC communities since Feb. 2019.

To request a grant from MAD RVA, an individual only needs to provide their name, address, and demographic information in a short, online form or call the MAD RVA hotline. Funds are distributed within 2 to 4 weeks. The process contrasts with the complexity of Virginia's unemployment system; like with many public assistance programs, claimants describe the process of filing for unemployment as convoluted, and say that it's difficult to reach a real human on the phone.

Mutual aid groups reject these sorts of dehumanizing, bureaucratic organizational structures in favor of collective care.

“Mutual aid is the way we support each other and focus on interdependence in our communities,” MAD RVA writes in its rapid response toolkit, “recognizing the failures of state apparatuses and the inevitable need for us to co-create a more just world.” Russian anarchist Peter Kropotkin popularized the concept of mutual aid in the early 1900s through his seminal research in evolutionary biology, which emphasized cooperation as essential for many species’ survival.

“It doesn't have to be a formalized organization. You don't need a business license or a 501(c)(3) status or anything,” Sohal told Motherboard. “It is just a group of people coming together, seeing what people need, and what people have access to and how you can strategize to make those connections.” Mutual aid advocates place this work in contrast to the non-profit model of charity, which has been critiqued as siphoning energy from grassroots movements and funnelling it into top-down organizations that do not build community power.

But despite their best efforts, MAD RVA is still a relatively small organization, and isn’t able to provide support to everyone who needs it. “Instead of trying to meet everyone’s needs,” said Sohal, “we think it’s a more sustainable and realistic strategy to get as many people on board with mutual aid, so that we can all support each other.”

‘Micro Grants’ Are Keeping Virginians Afloat While Waiting For Unemployment syndicated from https://triviaqaweb.wordpress.com/feed/

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biofunmy · 5 years

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Activists Build a Grass-Roots Alliance Against Amazon

SAN FRANCISCO — Amazon flourished over its first two decades with little opposition and less scrutiny. A new coalition and a report unveiled on Tuesday make clear that era is over.

The coalition, Athena, comprises three dozen grass-roots groups involved in issues like digital surveillance, antitrust and working conditions in warehouses. The goal is to encourage and unify the resistance to Amazon that is now beginning to form.

The report, from the Economic Roundtable, a nonprofit research group that focuses on social and economic issues in Southern California, delves into the largely unexplored topic of what Amazon is costing the communities where it has warehouses. The short answer: a lot.

While the simultaneous arrival of Athena and the report are a coincidence, they are linked by their attempts to understand and ultimately influence Amazon’s push into almost every aspect of modern life. The internet conglomerate hired 97,000 employees over the summer, nearly the total employment of Google. The report is bluntly titled “Too Big to Govern.”

“This is a company functioning at a scale that was previously left to government,” said Tom Perriello of the Open Society Foundations. Founded by the billionaire George Soros, Open Society is providing some of the seed funding for Athena. The coalition is raising $15 million to cover its first three years.

“It has incredible impact,” Mr. Perriello said of Amazon. “Who could possibly shape its future and direction?”

Amazon, like Facebook, Apple and Google, has drawn the attention of Washington regulators, state attorneys general and at least a few politicians in the last year. The central question being asked about all of the companies: When does a tech platform become too big and powerful, ultimately hurting the society it once dazzled?

In Amazon’s case, the situation is particularly complicated. Its aspirations long ago exceeded online retail to encompass fresh groceries, devices that connect your home to the internet, front-door and neighborhood surveillance, professional services like plumbing and contracting, health care, government procurement, internet infrastructure and Hollywood entertainment. Just about everything, really.

Amazon declined to comment for this article.

Athena springs out of several unexpectedly successful grass-roots efforts to rein in Amazon’s power.

Last fall, the retailer was forced to begin paying a $15 hourly minimum wage nationwide. In February, it abandoned plans to establish a new headquarters in New York after opponents mobilized against Amazon and the politicians who had approved the deal. This month, an attempt to stack the City Council in Seattle, the company’s hometown, with members more acceptable to Amazon backfired with voters.

These setbacks could be attributed to many factors, but one of them was the influence of labor and immigrant organizations. Now some of those groups are joining together under Athena.

“We’re learning from what makes Amazon back down, and looking to replicate that as much as possible with as many people as possible,” said Dania Rajendra, the Athena director.

Athena will be run from New York, but the real work will be done out in the field where most of the member organizations are. They include the Awood Center, a Minneapolis nonprofit that has organized Amazon workers from East Africa; Warehouse Workers for Justice, which is based in Chicago; and Fight for the Future, a group that focuses on digital issues, in Massachusetts.

In a separate move on Monday, Fight for the Future and other groups called on Congress to investigate Amazon’s surveillance products, including the Ring front-door monitor and Rekognition facial tracking software. The products threaten “our privacy and civil liberties, especially in brown and black communities,” the groups said.

The effort against Amazon will not be easy, said Lauren Jacobs of the Partnership for Working Families, a coalition member in Oakland. Amazon is projected to have $238 billion in sales this year with 750,000 employees.

“This is a David and Goliath story,” she said. “David took what he had and turned it into a winning strategy. We’re taking what we have — the voices of the members of our various organizations, our collective knowledge and experience and deep understanding of the economy around Big Tech, and the experience we’ve had with making this company shift its behavior — and trying to build a more humane economy.”

Athena’s $15 million budget is modest for the scale of change it hopes to bring about . “This is grass-roots democracy,” said Barry Lynn of Open Markets Institute, a Washington think tank and coalition member focused on antitrust issues. “There’s no money in it. Just people.”

Mr. Perriello of the Open Society Foundations said updating protest movements for the digital era was an interesting challenge.

“Uncertainty is now baked into the model,” he said. “You don’t know where the fight is going to be two months from now or two years from now. So you need the ability to organize citizens of very different political stripes across geographies and across demographics, where traditionally you had to organize in place.”

The name Athena is associated with democracy, freedom and wisdom. But it has another advantage for the coalition.

“We didn’t want to have Amazon in the name — People Against Amazon or whatever — because part of the strategy is to offer a better vision for how the economy could work,” said Stacy Mitchell of the Institute for Local Self-Reliance, a nonprofit in Maine that opposes corporate concentration and advocates local community development. “To be for something, not just against.”

Sheheryar Kaoosji of another coalition member, the Warehouse Worker Resource Center in Ontario, east of Los Angeles, said Athena was not planning a boycott of Amazon but more interested in trying to sway it — including its employees and customers.

“Half the households in America have an Amazon Prime account,” Mr. Kaoosji said. “That gives them a huge amount of power to change the company.” His group is dedicated to improving conditions in what is sometimes called “the goods movement sector.”

The resource center is in California’s Inland Empire, where the work gets done to process those packages that appear on porches in Santa Monica and Newport Beach as if by magic.

Amazon workers and Amazon customers exist in two different worlds, the Economic Roundtable said. The report calculates that a little over half of Amazon warehouse workers in Southern California live in substandard housing. And for every $1 in wages, they receive 24 cents in public assistance.

“Every day, ships, trucks, trains and airplanes bring an estimated 21,500 diesel truckloads of merchandise to 21 Amazon warehouses in the four-county region,” the Economic Roundtable report said. It calculated that Amazon trucks last year created $642 million in “uncompensated public costs” for noise, road wear, accidents and harmful emissions.

Almost as an aside, the report indicated how adept Amazon, with a stock market value of nearly $900 billion, is at getting funding from California and local communities. This included $25 million from the California Film Commission to subsidize six productions, including the third season of “Sneaky Pete,” an Amazon crime drama, and $1.2 million from the California Office of Business and Economic Development toward an office building in Irvine for programmers.

The report noted on its title page that it was underwritten by the Los Angeles County Federation of Labor, which represents more than 800,000 members of 300 unions. The Economic Roundtable said that did not affect the results.

Among the report’s suggestions: that Amazon raise its minimum wage to $20 an hour, that it require its logistics subcontractors to do the same, that it provide child care at its warehouses and that it build affordable housing in its logistics communities.

The report draws on California Public Records Act requests filed with communities with Amazon facilities. Many of them nevertheless came up empty. The report noted that very little of Amazon’s business was known to anyone but Amazon. Communities are in the dark.

“Our conclusion is that it’s time for Amazon to come of age and pay its own way,” said Daniel Flaming, a co-author of the report. “This means paying its full costs to the communities that host it and the workers who create its profits.”

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algarithmblognumber · 6 years

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Nature Sears, the Original Everything Store, Nears a Bankruptcy Filing

Nature Sears, the Original Everything Store, Nears a Bankruptcy Filing Nature Sears, the Original Everything Store, Nears a Bankruptcy Filing http://www.nature-business.com/nature-sears-the-original-everything-store-nears-a-bankruptcy-filing/

Nature

Image

Founded after the Civil War, the original Sears, Roebuck & Co. developed a catalog business that sold the latest dresses, toys, build-it-yourself houses and even tombstones. The company’s stores, which began to spread across the country in the early 20th century, were showcases for must-have appliances, snow tires and furniture.CreditCreditSears, Roebuck & Company

More than a century ago, Sears pioneered the strategy of selling everything to everyone.

But it has long since given up that mantle as a retail innovator. It was overtaken first by big box retailers like Walmart and Home Depot and then by Amazon as the go-to shopping destination for clothing, tools and appliances.

Now, the retailer is preparing to use a Chapter 11 bankruptcy filing to cut its debts and keep operating at least through the holidays, according to two people briefed on the matter who spoke on condition of anonymity to discuss the company’s plans.

As part of the reorganization plan, which was expected to be filed overnight, Sears is to receive a loan of more than $500 million to help keep its shelves stocked and employees paid, these people said. The company is also planning to close as many as 150 additional stores as it tries to reduce costs and find some way forward.

In the last decade, Sears had been run by a hedge fund manager, Edward S. Lampert, who sold off many of the company’s valuable properties and brands, but failed to develop a winning strategy to entice consumers who increasingly shop online.

The result has been a long painful decline. A decade ago, the company employed 302,000. Today, there are about 68,000 people still working at Sears and Kmart, which Mr. Lampert also runs.

“It’s a sad day for American retail,” said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. “There are generations of people who grew up on Sears and now it’s not relevant. When you are in the retail business, it’s all about newness. But Sears stopped innovating.”

Founded shortly after the Civil War, the original Sears, Roebuck & Company built a catalog business that sold Americans the latest dresses, toys, build-it-yourself houses and even tombstones. In their heyday, the company’s stores, which began to spread across the country in the early 20th century, were showcases for must-have washing machines, snow tires and furniture.

More recently, Sears became known for another distinction — Mr. Lampert’s audacious feats of financial engineering. He has spun off numerous assets from the retailer into separate companies that his hedge fund invests in.

While many of these spinoffs have flourished, Sears has slid toward insolvency.

Over the last five years, the company lost about $5.8 billion, and over the last decade, it shut more than a thousand stores. Many of the 700 stores that remain have frequent clearance sales, empty shelves and handwritten signs.

Sears stores remain the centerpiece of hundreds of shopping centers across the United States and their decline has reduced traffic to many of those malls.

Running low on cash, the company has a $134 million debt payment due on Monday. Its total debt stood at about $5.6 billion in late September.

Image

Since 2005, Sears has been run by a billionaire hedge fund manager, Edward S. Lampert, who stripped out many of the company’s valuable properties and brands — and then laid claim to much of what is left over — while failing to develop a winning retail strategy.CreditSears Holdings Corp., via Bloomberg

Over the weekend, a group of banks was negotiating with Sears over the terms of a new loan, totaling more than $500 million, the people briefed on the matter said.

Reorganizing Sears will not be easy. The company’s e-commerce business has only a tiny fraction of the sales of Amazon, one of the world’s most valuable companies. And bringing back customers to Sears stores will take investment that the company probably cannot afford.

The rise of e-commerce has contributed recently to a record number of stores closings and retail bankruptcies including Sports Authority, Payless Shoes and Toys “R” Us.

Like Sears, Toys “R” Us had tried to reorganize, but the company eventually shut down and laid off all of its employees in June when its lenders concluded that the business was no longer viable.

Although Sears lost its competitive edge long ago, its impending bankruptcy still represents a significant moment for its industry.

No other large retailer has endured as long or played as important a role in American life as Sears.

The company started out selling watches to railroad agents in 1886 and soon expanded into a vast mail order business that sold clothing, tools, shoes, at one point even cocaine and opium, through catalogs that ran as long as 1,000 pages.

Sears Roebuck was, in many ways, an early version of Amazon. It used the Postal Service to reach the most remote parts of a growing nation and stored and shipped products from a three-million-square-foot warehouse in Chicago.

After World War II, Sears stores served the needs of the country’s expanding middle class. Families came to have their children’s’ portraits taken, to get their tires rotated and oil changed, and to buy Kenmore refrigerators.

“Sears is where you went to shop,” said Barbara E. Kahn, a retail expert and marketing professor at the University of Pennsylvania’s Wharton School. “They sold fundamental products that consumers needed.”

Through the 1960s and 1970s, Sears shared its success with employees at all levels of its corporate hierarchy. Cashiers, janitors and executives alike took part in profit-sharing and received options in the company’s soaring stock.

As many as 100,000 retired Sears employees still receive pensions, which are expected to emerge largely unscathed in the bankruptcy. As the company was bleeding cash and selling off assets in recent years, federal regulators required Mr. Lampert to inject cash into the pension plan. Other benefits for retirees like life insurance, however, could be in danger.

Image

Sears lost roughly $5.8 billion over the last five years and shut down more than 1,060 stores over the past decade. The result has been a long painful decline for the 68,000 people still working at Sears and Kmart, which Mr. Lampert also runs.CreditColey Brown for The New York Times

“It is sad to see the company you really loved go down the tubes,’’ said Ron Olbrysh, 77, who worked in Sears’s legal department for 24 years and now heads an association of retired workers.

By the 1990s, Sears was struggling to find its place. Walmart was plopping its super centers across the United States. Home Depot was taking away market share on appliances and power tools, but Sears had valuable brands like Kenmore, DieHard and Lands’ End, and stores in prime locations.

Things changed dramatically when Mr. Lampert arrived on the scene.

A hedge fund manager who got his start at Goldman Sachs and had little experience running a large retail chain, Mr. Lampert took control of Kmart after it came out of bankruptcy in 2003 and then acquired Sears a year later. The company’s board came to be dominated by other wealthy investors, including Steven Mnuchin, the current Treasury secretary who had been Mr. Lampert’s roommate at Yale.

Mr. Lampert says his strategy was to move the company away from its brick-and-mortar legacy into the digital era.

His plan was to use the money saved from closing stores and selling off assets to reinvest in the business. But the company never gained traction online.

The company’s decline has also exacted a toll on its workers. Peggy Mitchell, 55, who works full time unloading delivery trucks at the Sears in Chicago Ridge, Ill., said she barely makes enough to make ends meet.

Ms. Mitchell, who has four children, earns $10.75 an hour and cannot afford the company’s health plan. “Walmart pays more than that,” she said.

Sears remains a publicly traded company, but Mr. Lampert exerts an enormous amount of control. Mr. Lampert is the chairman and chief executive and his hedge fund ESL Investments is the largest shareholder and a major lender.

He orchestrated a series of deals that generated cash for Sears in the near term, but stripped out many of the company’s most valuable assets — often selling them to companies that he also has a stake in.

Shares of Sears, which topped $120 as recently as 2007, closed on Friday at 40.7 cents.

Sears spun off Lands’ End, the preppy clothing brand, into a separate company, which Mr. Lampert’s hedge fund took a large stake in. The market value of Lands’ End now dwarfs that of Sears.

In 2015, Sears sold off stores worth $2.7 billion to a real estate company called Seritage. Mr. Lampert is a big investor in that company as well as its chairman. Seritage is converting many of the best locations into luxury offices, restaurants and apartments.

Mr. Lampert is also seeking to buy the Kenmore brand from Sears for $400 million.

Even in bankruptcy, Mr. Lampert will have great sway over the company’s fate. His hedge fund owns about 40 percent of the company’s debt, including about $1.1 billion in loans secured by Sears and Kmart properties. As a result, he could force Sears to sell the stores or transfer them to him to repay that debt.

“Lampert will make out,’’ said Mr. Olbrysh, the retired Sears worker. “There is no question about that.”

Tiffany Hsu and Michael J. de la Merced contributed reporting.

Read More | https://www.nytimes.com/2018/10/14/business/sears-bankruptcy-filing-chapter-11.html |

Nature Sears, the Original Everything Store, Nears a Bankruptcy Filing, in 2018-10-15 03:42:24

#Nature of Business in the Current Market

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magicwebsitesnet · 6 years