Sears And K-Mart: An Overview Of The Sears Financial Crisis

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Sears has created a “Financial Crisis” when hedge fund manager Edward Lampert took over control of the company. The mentality of investors of a CFO is an important viewpoint during crisis because it can help streamline process and reduce cost. Retail experience should be dominant the retail in order to feel the pulse of the consumer desires and to determine proper margin levels while eliminating inefficiencies in the organization. According to Marina Strauss of the Globe and Mail, “a sweeping change will be required to improve the retailer’s outlook”. She quoted the (CEO of Sears-Canada) Mr. McDonald saying in a memo that “Our store are too difficult to shop in. We have inconsistent execution…We do not offer the right product in the right market” (STRAUSS M., 2011). Executive Summary Sears Holding Corporation is the fourth largest retailer in the United States and Canada. Their supplements include Sears, Roebuck and Co. as well as K-Mart. “The closing of the merger between Sears and K-Mart took place on March 24, 2005. Sears has more than 4,000 retail stores across the United States, Canada, Puerto Rico, and Guam. Sears offers products and services through over 2,700 branded and affiliated stores. Sears operates 894 broad-line stores and 1,354 specialty stores. Sears’ broad-line stores are mall-based locations. The specialty stores include Sears Hometown Stores that are mostly independently owned, Sears Home Appliance Showrooms, Sears Hardware Stores, Sears Auto Centers, and The Great Indoor Stores (Sears Holdings, 2011).” “Sears is the leading retailer in home appliance, tools, lawn and garden, electronics, and automotive repair and maintenance. They are also the largest home service provider and answers over 11 million service c... ... middle of paper ... ...insey & Company, provided leadership for Sears in using Carnegie model concepts and techniques, and creating and capitalizing on synergies among merchandising, insurance, real estate, and financial services (David, F., 1989). The ability of a company to maintain a good reputation is directly linked to the company’s ability to retain its stakeholders (Peterson, 2005). During a negative event or crisis situation, a company needs to ensure that it has effective strategies and resources in place, to deal with it responsibly, efficiently to minimize losses in share price value and public perceptions of corporate reputation (Coldwell .D, Joosub .T, & Papageorgiou .E, 2012). It is always advantageous to analyze past crises in order to develop a conceptual understanding of crisis situations and appropriateness of various means of coping with them (STERN, E. K., pg.1, 2009).

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