1. Describe recent trends in the hedge fund and private equity industry and the growing overlap between the two.
- The line between some types of hedge funds and private equity LBO funds are being blurred in recent times. But most hedge fund strategies are still quite distinct from the LBO investing model.
- In the early year’s hedge funds active in the LBO arena would try to buy defaulted or near default bonds and then resell them in weeks or months later at a profit. But in recent times hedge funds have started to hang onto the distressed investments through the whole bankruptcy process, leaving them with substantial and sometimes controlling stakes in the companies. When the companies come out of bankruptcy the hedge funds claims
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Could Sears have succeeded as a standalone retailer?
- Sears strategy for decades was based in malls, but after seeing the increasing sales of its competitor’s stand-alone “big box” retail model. Soon after Sear’s management started experimenting with an “off-mall” concept called Sears Grand. Sears experiment was successful and management wanted to roll out the off-mall Sears Grand concept nationwide at a fast pace and the same time Kmart wanted to sell fifty Kmart locations. The deal created significant values for both companies. This really got the wheels turning for both management teams for a possible merger.
- Yes, I do think Sears could have succeeded as standalone retailer, but it would have much more difficult without the merger. Sears would have expended a larger amount of cash to acquire or build new locations, thus increasing its leverage. Also By entering the stand-alone big box retail market for the first time, they would be exposing themselves to large competitors like Wal-Mart and Target, which was one main reason for the Kmart bankruptcy.
4. Evaluate Lampert’s strategy and the benefits for Sears’s shareholders.
- Lampert’s strategy was to convert some Kmart stores into Sears and bringing Sears products into Kmart stores, reduce marketing costs, lowering COGS, lowering SG&A through synergy opportunities, increasing per square foot sales for Kmart, and also monetize and nonproductive assets.
- Sears’s shareholders gain many benefits from
Sears is similar to any other organization, and that they are also seeing challenges at the corporate level of their business. A challenge that they have to face is ensuring quality and variety of the products that are being sold in their stores. This is an issue that could lead to great declines in sales if not properly handled. Many individuals do not take into consideration all the different aspects that happen
Our recommendation is to take Sears Holdings Corp. (SHLD) private through a private equity buyout. After doing so, we recommend implementing a centralized management structure and recruiting retail-savvy executives for the upper management team. We then recommend focusing on increasing value by capitalizing on SHLD’s real estate holdings through leasing agreements and increasing partnerships with complementary enterprises. Also, we recommend improving employee retention rates and retaining exclusive rights to private brands. Finally, we recommend focusing on a long-term strategy to continue to maximize SHLD’s ecommerce platforms. We believe these recommendations will lead to long-term stability through increases in customer base and
90) As the battle to maintain leadership wages against Ralph the greed of others constantly causes hurdles in the separate battle for survival. Greed is an everyday struggle in the real world and can be seen when Sears purchased Kmart in an effort to make more money by reviving a struggling business. This attempt by Sears prompted the collapse of their entire corporation and it is still struggling today. The New York TImes explained “Five years after the merger, Sears Holdings is beleaguered, with sales markedly worse than its competitors’.” This is proof of the negative effects that greed had on a real world situation.
Through analysis, it is evident that the company must be restructured entirely through the implementation of a differentiation strategy. This strategy will focus solely on transforming the company into a retail chain providing competitively priced appliances, electronics, furniture and home décor. While maintaining a strategically competitive price point, Sears will be able to maintain competitive prices to draw consumers
Kroger has merged with several companies expanding its range across the United States. They have merged with companies such as Dillon Companies Inc, Fred Meyer Inc, and Harris Teeter. The merger in 1999 with Fred Meyer was huge for Kroger simply because Kroger became the market with the largest geographic span.
This paper will discuss the kroger company’s strategy and competitive advantage. It will also discuss competition and strategy from rival company Walmart. Research will show whether Kroger uses an offensive or defensive strategic approach to business practices. It will discuss mergers and acquisitions of The Kroger Company (Bethel University, 2017).
The following pages focus on providing a strategic analysis of Sears Holding Corporation. The introduction reveals the issues that the paper addresses. The Company Presentation section reveals important facts in Sears' evolution. The Strategy Debates Section discusses theoretical issues applied to the situation of Sears. This is followed by the Strategic Decisions section that provides a series of recommendations that can help Sears improve its situation. The Implementation Challenges section provides important issues that can be considered challenges of strategic implementation.
Wal-Mart operates fewer stores than Sears but is ahead in terms of total selling area by a ratio of 3.4:1. Between 1995 and 1997, Sears’ retail store revenue per selling square foot was not only lower than that of Wal-Mart but in decline.
One of the main reasons Sears and Kmart merged was that Sears had started investing in stores that were free-standing and not located in malls. These stores were larger, newer, and called Sears Grand. Sears then purchased a large number of Super Kmart stores earlier in 2004, which made it much easier for the merger to be completed (Barbash & Barbaro, 2004). The process was accelerated by the number of stores the companies already owned, and was not as complicated or time consuming as a merger of companies that were not in any way related to one another or where there was no cross-store ownership.
Sears Holding Corporation is the fourth largest retailer in the United States and Canada. Its subsidiaries 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,
Discuss Buffett’s analysis of the junk bond failures of the 1980s.What is Buffett’s view of the role to be played by investment bankers?
Due to slow sales and less traffic at both Sears and Kmart, the two have decided to merge creating one entity named Sears Holdings. Kmart has agreed to buy Sears for $11 Billion. This puts Sears Holdings at the third largest retailer behind Wal-Mart and Home Depot. Although Wal-Mart is a direct competitor with Kmart, Sears Holdings goal is not to compete with Wal-Mart directly, but find areas that have been overlooked by other retailers, and take advantage of the expanded line of products the new company has to offer. Sears has had higher sales than Kmart, so hundreds of Kmart’s will be transformed into Sears stores. As of now, most of Sears 870 stores are only found in malls. The new strategy would be to open Sears stores in current
Sears Holdings Corporation is a company that came from two very well known organizations, Sears and Kmart. Both companies go back even farther than the 1900s and unfortunately both companies experienced financial difficulty at one point. With the merger Sears Holdings Corporation has the experience of both organizations as well as their different style of operating. Along with an improved customer base and a new outlook Sears Holdings Corporation is experiencing financial growth.
Sears was split into retailing, service, and credit businesses. The retailing segment consisted of the
As we can see Sears owns different companies/products within its business. Another strength is that this company has many employees because it has so many different locations around the U.S. By having lots of locations you are going to have many employees, which is great. In one article I read I was able to see some of the weaknesses. As stated, “Sears Holdings spent $5.8 billion buying back shares from 2005 to 2010, draining the company 's capital. Now, it has a major cash flow problem” (Rittenhouse, 2017). This shows that this company has to buy back it shares because if it does not they will lose more money than they are even producing. Another weakness that I read was, “From allegedly rude employees to poor customer service, even loyal customers have lost trust in the company” (Rittenhouse, 2017).