Sears Holding, once the largest US retailer, is warning investors about its ability to continue as a going concern.
The Sears catalog inspired moms to buy from home, and kids to dream of what could be...for birthdays and Christmas. It defined post-WWII American consumerism.
However, decisions made---or not made in the past 10 years, have led to the near inevitable fall of this American icon.
Its eminent collapse leaves a life lesson for all of us.
I will be discussing this and other current events on the radio today. You may join me live at 9 AM PDT on the radio, on your computer or on your phone. Here's how.
"Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern," was the message to stockholders in Sears' annual report for fiscal year ended January 28.
Ironically the warning comes less than 6 weeks after the company announced what it called the "next phase of its strategic transformation."
Sears was considering selling some of its businesses, such as Kenmore and DieHard car battery brands this year. That likely won't help at this point. It has already sold its Craftsman line of tools.
The company lost $2.22 billion in the year ended January 28.
Since 2013, it has accumulated $7.4 billion in losses.
It has seen revenue fall 44% to $22.1 billion. And during that time, Sears has cut the number of US stores by nearly a third and spun off the Land's End clothing chain it owned.
Sear's total liabilities, according to their annual report, stand at $13.19 billion.
So why does substantial doubt exist that this icon of retail can continue to exist? What got them to this point?
The popular answer is, "They failed to adjust to the changing dynamics of retail."
That's true, they did fail to adjust, however, a New York Post business writer says there is another, more fundamental reason.
The Post says, "The retailer's fate was sealed roughly 10 years ago when owner Eddie Lampert [majority stock holder] the hedge fund billionaire, bought the chain, merged it with Kmart and then decided to all but stop investing in the chain's upkeep and capital spending."
And neglect has consequences.
The Post doesn't call it that, but that's exactly what they are describing---and what Sears' annual report reveals.
Neglect is an inaction that is noted in history from the biblical account of man's earliest existence to those who accomplish great things today, there is a consensus about "Neglect."
As George Washington thought about the newly formed America and its safety he said, "Nothing can be more hurtful to the service, than the neglect of discipline; for that discipline more than numbers, gives one army rise over another..."
Noah Webster, an American Founding Father and creator of our public education system, said, "If citizens neglect their duty and place unprincipled men in office, the government will soon be corrupted"...and he said, "If the republican government fails to secure public prosperity and happiness, it must be because the citizens neglect the Divine commands, and elect bad men to make and administer the laws."
Neglect has various consequences.
- Ben Franklin said, "A little neglect may breed great mischief."
- Walt Disney said, "A man should never neglect his family or his business."
Neglect has personal spiritual consequences.
- Charles Spurgeon said, "Half our fears arise from neglect of the Bible."
- William Wilberforce said, "Of all things, guard against neglecting God in the secret place of prayer."
- Oswald Chambers said, "Spend plenty of time with God; let other things go, but don't neglect Him."
Neglect has health consequences.
Dr. Ben Carson says, "The mind controls so much of the body. We are much more than flesh and blood; we are complex systems. Patients do better when they have faith that they're going to do better. That's why I always tell my patients and their families not to neglect their prayers."
Neglect has cultural consequences.
Ken Ham, well known for his sermons and lectures on Creationism, says, "Sadly, when pastors choose to neglect controversial issues, they do great damage to the spiritual growth of their congregates. We have generations of young people in our churches who simply believe what the world believes on social and moral issues, and they don't think biblically on these matters, because we have neglected to speak about these matters."
And finally, God says neglect has eternal consequences.
"How shall we escape if we neglect so great a salvation, which at the first began to be spoken by the Lord, and was confirmed to us by those who heard Him"
It has been said, "Freedom can be killed by neglect as well as by direct attack."
Be Diligent. Be Free. Be Blessed.