Once the largest retailer it the world, people want to know – will Sears go bankrupt? There are a lot of companies going belly up and a lot of people attribute this to the financial crisis and the economic instability in the world. The reality is often different because a lot of companies fail because of lack of vision and bad management. Of course when a big company employing thousands of people in the US and Canada gets into difficult, it only becomes public knowledge when there is almost nothing that can be done to save it. The recent financial crisis has seen a lot of companies bite the dust. The strange thing is that a lot of these companies were already on their way out years ago. The question for most is not if but when.
When it comes to a company like Sears that has been around since the 1800s, it is almost unthinkable that such a brand can actually go out of business. The world has change a lot in the last 25 years and the fast moving pace at which everything is now done means you can come and go with just a click of the button. There was the merger between Kmart and Sears in 2005 which at the time appeared to be a good move. The question now is, was the merger a mistake? Was there any sound business idea behind the decision? It is of course easy to analyze with the benefit of hindsight. Will Sears go bankrupt?
There are those who think Sears will definitely go bankrupt because its revenue is down and it cannot keep the amount of employees and stores it currently have. The company is still worth millions and has a lot of asset that potential buyers will be interested in. Wal-Mart which is one of the many competitors of Sears might buy the ailing company and extend its reach in the US and Canadian market. The management theme might decide not to sell but break up the alliance with Kmart in order to avoid bankruptcy. They might decide to kill one of the brands and save millions by marketing under a single brand. This will likely be a good way to save some money because two brands competing against each other in difficult financial context aren’t sustainable.
Sears might not go bankrupt but it will need to undergo some major changes if it wants to survive. The business strategy that has kept the brand going for so long is obviously no longer working. Something has to change and it has to happen yesterday.