SEARS HEADS TOWARD BANKRUPTCY

Sears, a Onetime Retail Giant, Reshaped America – The Wall Street Journal. https://www.wsj.com/articles/sears-once-americas-biggest-store-collapses-into-bankruptcy-1539595803

At least some of the past or present Sears execs understood the problem. Sears cut costs improperly and diid not invests enough in the stores. Compared to other department stores, the customer experience was lacking at Sears.

Sears does have the potential for a future. But, it will need to consider what that future will look like. In Nearing the End, I give a plausible suggestion.

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NEAR THE END?

Sears Prepares for Bankruptcy Filing as Debt Payment Looms – The Wall Street Journal. https://www.wsj.com/articles/sears-hires-advisers-to-prepare-bankruptcy-filing-1539136189

The iconic once retail giant may be nearing its final stretch. Or maybe it can dwarf into a profitable condense form of itself. If the latter, it will need to find a way to develop and connect with a new target market not already retired.

At one point Sears dominated the retail landscape, largely because it was the first general retailer to market offerings for the entire family and the one willing to stand by its products. As the market change with new players, Sears never effectively captured a new market group.

If Sears does survive, it needs to have a narrower focus. One approach could be deconstruction of their retail concept by creating two distinct chains. One could be a clothing targeting people that may not be served by more trendy stores or a channel for professionals looking for everyday affordable clothes. Another would be an autonomous Sears Auto not tied to a store.

At this point, the Sears leadership team is probably focused on seeing how many tomorrows it has left. If there some, they need to consider what those days will look like.

GOOGLE BREACH

GOOGLE DATA BREACH (WSJ)

The list of big name tech companies experiencing data breaches continues to grow. There is something troubling about the way Google sought to avoid disclosing the breach, in fear of scrutiny and regulation. When a breach happens, a company should focus first and foremost on the impact of its users. The concerns for reputation should come after it address the breach, implement fixes, and handles user exposures.

The focus on protecting its own reputation through secrecy is quite troubling. Big tech companies generally have a reputation of being an agent of positive social good. But, this kind of brings perspective that maybe big tech companies are like all other ones. When trouble hits, their leaders focus on the institutional reputation over the impacted consumer base.

This is a generalization, as some tech companies handled breaches appropriately. Facebook, who had a much larger and significant breach, proactively took steps to ensure data protection was increased following exposing 50 million users. Facebook did not hide the breach, but focused on its actions to address it.

Google is not a bad company, but this is a bit shady. After skipping a Congressional hearing on internet security, this does not certainly does not help.

 

 

THAT WAS QUICK

GE Ousts Flannery After Missed Targets https://www.wsj.com/articles/ge-names-new-ceo-replacing-flannery-1538392715

A company that typically values longterm stability in its highest office made a change after a single year. Large shortcomings in GE’s power division negatively impact performance as a whole, leading to John Flannery being out of a job.

GE is an iconic brand, whose once largesse scale made it a global giant, now struggles to provide stable returns for investors. After divestitures and restructuring, issues still remain, although its healthcare and aviation show positive growth.

Now, GE turns to Larry Culp, who now knows he will not have the long tenure afforded to Jack Welch or Jeffrey Immelt. Culp is former CEO of Dannaher and a lecturer of orgazational behavior at Harvard Business School.

Hopefully, Culp can lead the turnaround at GE that evaded his predecessors.

ANOTHER CYBER BREACH

Forbes: How Facebook Was Hacked And Why It’s A Disaster For Internet Security. (FORBES)
https://www.forbes.com/sites/thomasbrewster/2018/09/29/how-facebook-was-hacked-and-why-its-a-disaster-for-internet-security/

If you are like myself 50 million other users, you had to relogin because of the recent hack. Facebook was not the first nor will it be the last tech company to be hacked. The question is what is really being done, not only by these firms, but government to bring justice to hackers.

Does not appear to be much or enough to be effective. A difficult challenge, but one policymakers need to consider ramping up penalties against both hackers and the nations that host them.

 

STEEP COST FOR A TWEET

Elon Musk to Step Aside as Tesla Chairman in SEC Deal (WSJ) https://www.wsj.com/articles/elon-musk-can-remain-tesla-ceo-but-must-step-down-as-chairman-in-sec-settlement-1538257394

The SEC reached an agreement to settle accusations against Tesla founder Elon Musk, who made tweets aboit taking Tesla private that impacted shareholder value. In the settlement, Musk must step down as chairman for at least 3 years, but will remain CEO. Musk and Tesla will pay a combined fine of $40 million.

Executives are required to provide factual information to shareholders, even if disseminating information via Twitter. But, did Musk cause $40 million in damage? Maybe  but that is one expensive tweet.

END OF AN ERA

HBO to drop boxing coverage at end of 2018

http://www.espn.com/boxing/story/_/id/24814171/hbo-drop-boxing-coverage-end-2018

HBO will exit the boxing business at the conclusion of 2018. Given the clear lack of big name draws, outside of a handful that fight on Showtime’s PPV, it makes sense for the network to focus on providing those time slots to other programming.

While there are many great boxers, few have the appeal and broad notoriety to draw big PPV buys like Mayweather or Pacquiao, who are retired or close to retirement. In the face of competition from the likes of the UFC, boxing’s appeal is limited for the masses.

Boxing is a great sport but is lacking great stories and personalities. Some with potential to become transcendent stars, either lost or plagued with doping violations. People like Anthony Joshua or Deontay Wilder may be able to draw fans back. But, both will need to continue their trajectories.

RATE INCREASE

Fed Raises Interest Rates, Signals One More Increase This Year – The Wall Street Journal. https://www.wsj.com/articles/fed-raises-interest-rates-signals-one-more-increase-this-year-1537984955

Given the strong economic growth, the raising of interest rates makes sense to stabilize growth. Growth is always a good problem to have, but economists always look for sustainable growth. Boom this year, bust next year is not ideal. But, our economy can still growth at a stable rate even with the increase cost of borrowing funds.