WEBVTT 00:00:00.000 --> 00:00:03.700 It is February 14th, 2026. And while, you know, 00:00:03.700 --> 00:00:05.639 half the country is probably scrambling for dinner 00:00:05.639 --> 00:00:09.380 reservations right now, we are looking at a very 00:00:09.380 --> 00:00:13.500 different kind of milestone. Because as of December 00:00:13.500 --> 00:00:16.980 2025, just two months ago, there are now only 00:00:16.980 --> 00:00:20.879 five Sears stores left. Five. In the entire United 00:00:20.879 --> 00:00:24.019 States. Five. It's a number that just doesn't 00:00:24.019 --> 00:00:27.019 compute, does it? Yeah. It feels wrong. Especially 00:00:27.019 --> 00:00:30.820 when you think about the sheer scale of what 00:00:30.820 --> 00:00:33.020 this company used to be. It feels like a typo 00:00:33.020 --> 00:00:35.240 in the data. You've got two in Florida, and one 00:00:35.240 --> 00:00:37.020 of them has been operating since 1954, which 00:00:37.020 --> 00:00:38.640 is incredible, and then a couple others scattered 00:00:38.640 --> 00:00:41.200 around. But that's it. That's the list. And if 00:00:41.200 --> 00:00:43.179 you're, say, 20 years old listening to this, 00:00:43.320 --> 00:00:45.539 Sears is probably just a ghost. It's that empty 00:00:45.539 --> 00:00:47.179 building at the mall where the Halloween store 00:00:47.179 --> 00:00:49.509 pops up in October. Right, it's a relic. But 00:00:49.509 --> 00:00:51.530 the sources we're diving into today, the internal 00:00:51.530 --> 00:00:54.109 records, the financial filings, they tell a story 00:00:54.109 --> 00:00:56.109 that is so much bigger than just a store going 00:00:56.109 --> 00:00:58.109 out of business. Oh, it's not a business failure. 00:00:58.189 --> 00:01:00.390 We're looking at the fall of an economic nation 00:01:00.390 --> 00:01:03.009 state. That's not hyperbole. That is the only 00:01:03.009 --> 00:01:05.870 way to describe it. The numbers are just staggering. 00:01:06.629 --> 00:01:09.409 At its peak, Sears wasn't just the biggest retailer. 00:01:09.920 --> 00:01:12.739 It accounted for one percent of the entire U 00:01:12.739 --> 00:01:15.299 .S. gross domestic product. One percent. Let 00:01:15.299 --> 00:01:18.019 that sink in. Think about that. That's like if 00:01:18.019 --> 00:01:20.400 you took Amazon and Walmart and maybe Google 00:01:20.400 --> 00:01:23.120 and smashed them all into one single entity. 00:01:23.400 --> 00:01:26.379 That was Sears in the 1970s. And that's our mission 00:01:26.379 --> 00:01:28.700 for this deep dive. We're not here to just, you 00:01:28.700 --> 00:01:31.420 know, get nostalgic about the smell of craftsman 00:01:31.420 --> 00:01:34.439 tools and popcorn. We need to unpack how a company 00:01:34.439 --> 00:01:38.260 that was literally Amazon before Amazon managed 00:01:38.260 --> 00:01:40.790 to lose every. And we have the documents to do 00:01:40.790 --> 00:01:42.989 it. We've got the extensive Wikipedia archives 00:01:42.989 --> 00:01:46.129 for both Sears and Sears Holdings, the 2018 bankruptcy 00:01:46.129 --> 00:01:48.950 filings, and some of the internal memos from 00:01:48.950 --> 00:01:51.409 what we have to call the hedge fund era. Ah, 00:01:51.409 --> 00:01:53.769 yes, the Lampert years. That's where things get, 00:01:53.829 --> 00:01:55.310 well, they get really interesting from a financial 00:01:55.310 --> 00:01:57.069 engineering perspective. And we are definitely 00:01:57.069 --> 00:01:58.469 going to spend a lot of time there. But to really 00:01:58.469 --> 00:02:00.530 understand the fall, you have to understand the 00:02:00.530 --> 00:02:03.030 ascent. Because the story doesn't start with 00:02:03.030 --> 00:02:04.590 the department store. It doesn't even start in 00:02:04.590 --> 00:02:08.099 Chicago. No. It starts on a dusty railroad platform 00:02:08.099 --> 00:02:12.840 in North Redwood, Minnesota in 1886. And it all 00:02:12.840 --> 00:02:17.280 began with a box of watches and a, let's call 00:02:17.280 --> 00:02:20.080 it a slightly sketchy wholesale tactic. This 00:02:20.080 --> 00:02:23.360 is the Richard Warren Sears origin story. And 00:02:23.360 --> 00:02:25.340 I love it because it's not some grand vision. 00:02:25.460 --> 00:02:28.099 It's just a guy spotting a simple inefficiency 00:02:28.099 --> 00:02:30.860 in the market. Exactly. Richard Sears was a railroad 00:02:30.860 --> 00:02:32.800 station agent. So he's the guy running the local 00:02:32.800 --> 00:02:36.580 depot. And one day, a shipment of gold -filled 00:02:36.580 --> 00:02:39.199 pocket watches shows up. addressed to a local 00:02:39.199 --> 00:02:41.219 jeweler. But the jeweler didn't order them. Nope. 00:02:41.360 --> 00:02:43.979 It was a classic, slightly shady move back then 00:02:43.979 --> 00:02:46.800 called unsolicited shipping. The wholesaler just 00:02:46.800 --> 00:02:48.919 sends the product, hoping the local guy feels 00:02:48.919 --> 00:02:50.840 pressured to pay for it just to get rid of it. 00:02:50.900 --> 00:02:53.020 And the jeweler said, no thanks. He refused the 00:02:53.020 --> 00:02:55.300 shipment. So now Richard Sears is just standing 00:02:55.300 --> 00:02:57.139 there on the platform with a box of watches nobody 00:02:57.139 --> 00:02:59.120 wants. The average person would have just shipped 00:02:59.120 --> 00:03:00.860 them right back. But Sears wasn't the average 00:03:00.860 --> 00:03:03.759 person. Not even close. He opens the box, looks 00:03:03.759 --> 00:03:06.699 at the manifest. The wholesaler wants $12 per 00:03:06.699 --> 00:03:10.189 watch. Sears knows from, you know, just being 00:03:10.189 --> 00:03:13.009 alive that a watch like that retails for about 00:03:13.009 --> 00:03:16.449 25 bucks in a jewelry store. Ah, so he sees the 00:03:16.449 --> 00:03:20.270 spread. He sees the arbitrage instantly. He realizes 00:03:20.270 --> 00:03:22.830 he can send telegrams up and down the rail line 00:03:22.830 --> 00:03:25.409 to other station agents and sell them the watches 00:03:25.409 --> 00:03:28.789 for $14. So he undercuts the jewelers, makes 00:03:28.789 --> 00:03:31.270 a $2 profit on every watch, and he doesn't need 00:03:31.270 --> 00:03:33.409 a storefront. He doesn't need inventory. He just 00:03:33.409 --> 00:03:35.710 needs the railroad. Yeah. It was his distribution 00:03:35.710 --> 00:03:38.129 network. It was brilliant. He eventually teamed 00:03:38.129 --> 00:03:40.770 up with a watch repair man named Alva Roebuck, 00:03:40.949 --> 00:03:43.150 which makes sense because if you're selling watches, 00:03:43.229 --> 00:03:44.909 you need someone who can actually fix them. Right. 00:03:45.169 --> 00:03:47.990 Sears was the salesman, not the technician. Precisely. 00:03:47.990 --> 00:03:49.610 And they moved the whole operation to Chicago. 00:03:49.849 --> 00:03:52.469 OK, let's pause there. Why Chicago? The sources 00:03:52.469 --> 00:03:54.830 really hammer this point home. It seems critical. 00:03:55.009 --> 00:03:58.490 Because in the late 19th century, Chicago was 00:03:58.490 --> 00:04:00.650 the Internet. It was the central node. It was 00:04:00.650 --> 00:04:03.210 the hub for the entire North American railroad 00:04:03.210 --> 00:04:05.919 network. If you wanted to ship something from 00:04:05.919 --> 00:04:08.280 the coast to the heartland or vice versa, it 00:04:08.280 --> 00:04:10.419 had to go through Chicago. It was the physical 00:04:10.419 --> 00:04:12.719 server for the country's logistics. Perfectly 00:04:12.719 --> 00:04:14.860 put. If you put a package on a train there, you 00:04:14.860 --> 00:04:16.540 could reach almost any corner of the country 00:04:16.540 --> 00:04:19.540 faster and cheaper than from anywhere else. Geography 00:04:19.540 --> 00:04:21.480 was destiny for them. So they're in the right 00:04:21.480 --> 00:04:24.839 city. In 1893, they officially become Sears, 00:04:24.959 --> 00:04:27.519 Roebuck and Company. And then comes the real 00:04:27.519 --> 00:04:30.519 revolution, the big book. The catalog. And it's 00:04:30.519 --> 00:04:33.279 almost impossible for us now to understand how 00:04:33.279 --> 00:04:36.720 groundbreaking this was. By 1894, it was 322 00:04:36.720 --> 00:04:40.399 pages. Just one year later, 1895, it's over 500 00:04:40.399 --> 00:04:42.699 pages. And it had everything. Sewing machines, 00:04:43.000 --> 00:04:45.339 bicycles, musical instruments. I saw in the notes 00:04:45.339 --> 00:04:47.740 they even sold automobiles for a while. They 00:04:47.740 --> 00:04:50.680 did. From 1905 to 1915, it was called the Sears 00:04:50.680 --> 00:04:53.259 Motor Buggy. It would arrive in a crate at your 00:04:53.259 --> 00:04:55.019 local train station and you'd have to, you know, 00:04:55.019 --> 00:04:56.860 do some final assembly. You could mail order 00:04:56.860 --> 00:05:00.019 a car? That's incredible. It is. But the car 00:05:00.019 --> 00:05:02.600 is just a fun detail. Yeah. The real innovation 00:05:02.600 --> 00:05:05.579 was the information itself. The catalog became 00:05:05.579 --> 00:05:08.379 known as the Consumer's Bible. And I want to 00:05:08.379 --> 00:05:10.660 dig into that name because it wasn't just about 00:05:10.660 --> 00:05:13.279 convenience. The sources point to a very specific 00:05:13.279 --> 00:05:17.240 reason it exploded in rural America. It was a 00:05:17.240 --> 00:05:19.529 way to escape a monopoly. You're talking about 00:05:19.529 --> 00:05:22.189 the local general store. If you're a farmer in, 00:05:22.269 --> 00:05:25.189 say, rural Mississippi in 1890, you have one 00:05:25.189 --> 00:05:28.350 place to buy things. One, the guy who runs that 00:05:28.350 --> 00:05:30.250 store sets the prices. He decides what you can 00:05:30.250 --> 00:05:32.930 and can't buy. There's no competition. The markup 00:05:32.930 --> 00:05:35.550 was insane. And this is where a really important 00:05:35.550 --> 00:05:37.790 social dynamic comes into play, something the 00:05:37.790 --> 00:05:40.670 history often glosses over. For African -American 00:05:40.670 --> 00:05:43.329 families, especially in the Jim Crow South, that 00:05:43.329 --> 00:05:45.370 local store wasn't just expensive. It was often 00:05:45.370 --> 00:05:48.329 a place of profound humiliation. This is a... 00:05:48.399 --> 00:05:50.600 crucial part of the story. A black family could 00:05:50.600 --> 00:05:53.399 walk into that store and be ignored, be refused 00:05:53.399 --> 00:05:55.759 service or be charged double what a white customer 00:05:55.759 --> 00:05:58.220 would pay. They could be denied credit. It was 00:05:58.220 --> 00:06:00.220 an instrument of economic oppression designed 00:06:00.220 --> 00:06:01.899 to keep people in their place. But the United 00:06:01.899 --> 00:06:04.240 States Post Office doesn't care about the color 00:06:04.240 --> 00:06:07.699 of your skin. Exactly. The mailman is a federal 00:06:07.699 --> 00:06:10.360 employee. He has a mandate to deliver the mail. 00:06:10.500 --> 00:06:12.620 He delivers the package, no questions asked. 00:06:12.720 --> 00:06:15.420 With the Sears catalog, you filled out a form, 00:06:15.519 --> 00:06:18.279 you sent in a money order. And that was it. You 00:06:18.279 --> 00:06:20.800 got the same plow, the same dress, the same seeds 00:06:20.800 --> 00:06:23.759 at the exact same price as a white family in 00:06:23.759 --> 00:06:27.100 Ohio. It provided anonymity and dignity. It was 00:06:27.100 --> 00:06:29.699 an economic lifeline. It allowed black families 00:06:29.699 --> 00:06:32.339 to bypass those racist local power structures 00:06:32.339 --> 00:06:34.980 and participate directly in the national economy 00:06:34.980 --> 00:06:37.910 on an equal footing. It built a kind of brand 00:06:37.910 --> 00:06:40.750 loyalty that you just you can't buy with advertising. 00:06:40.949 --> 00:06:44.209 That's a powerful foundation. And on a more utilitarian 00:06:44.209 --> 00:06:46.290 note, the book itself was physically valuable, 00:06:46.430 --> 00:06:48.870 right? Ah, yes. The toilet paper thing. The toilet 00:06:48.870 --> 00:06:51.250 paper thing. The catalog was printed on a specific 00:06:51.250 --> 00:06:54.889 kind of uncoated newsprint. So in rural homes 00:06:54.889 --> 00:06:57.410 with an outhouse, once the new updated catalog 00:06:57.410 --> 00:06:59.370 arrived in the mail. The old one got a second 00:06:59.370 --> 00:07:01.870 life. The old one was hung on a nail and recycled 00:07:01.870 --> 00:07:05.319 page by page. It was in a very real way an essential 00:07:05.319 --> 00:07:07.800 part of daily life. Talk about market penetration. 00:07:08.120 --> 00:07:11.180 OK, so they're the undisputed kings of mail order. 00:07:11.360 --> 00:07:15.199 They are the Amazon of their day. But then trouble 00:07:15.199 --> 00:07:17.579 starts brewing, not in the company, but in the 00:07:17.579 --> 00:07:20.199 country itself. Right. There was the panic of 00:07:20.199 --> 00:07:23.660 1893, which was a huge economic depression that 00:07:23.660 --> 00:07:26.420 nearly bankrupted them early on. That's actually 00:07:26.420 --> 00:07:28.939 when Alvaro Buck got scared and sold his share 00:07:28.939 --> 00:07:31.430 of the company. He left. So it should have been 00:07:31.430 --> 00:07:33.949 Sears and Rosenwald. It really should have. Julius 00:07:33.949 --> 00:07:37.449 Rosenwald came in around 1895. He was the operational 00:07:37.449 --> 00:07:40.509 genius. If Sears was the visionary marketing 00:07:40.509 --> 00:07:43.350 guy, Rosenwald was the one who actually built 00:07:43.350 --> 00:07:45.589 the rational, efficient systems to make it all 00:07:45.589 --> 00:07:48.470 work. He's the one who took it public in 1906, 00:07:48.730 --> 00:07:51.689 the first major retail IPO in American history. 00:07:51.889 --> 00:07:54.009 But the bigger threat wasn't a financial panic. 00:07:54.170 --> 00:07:56.329 It was a demographic shift. It was urbanization. 00:07:56.709 --> 00:07:59.209 This is where a man named General Robert E. Wood 00:07:59.209 --> 00:08:01.930 enters the picture. He took over after Rosenwald 00:08:01.930 --> 00:08:04.389 shifted his focus to philanthropy. Wood wasn't 00:08:04.389 --> 00:08:06.250 a merchant. He'd worked on the Panama Canal. 00:08:06.569 --> 00:08:09.550 He was a military logistics guy. A numbers guy. 00:08:09.670 --> 00:08:11.370 And what did the numbers tell him? He looked 00:08:11.370 --> 00:08:14.649 at the 1920 census data and saw something profound. 00:08:15.589 --> 00:08:18.430 For the first time in American history, more 00:08:18.430 --> 00:08:21.910 people were living in cities than on farms. And, 00:08:21.910 --> 00:08:24.500 maybe even more importantly, They were buying 00:08:24.500 --> 00:08:26.819 cars. So the whole business model, which is built 00:08:26.819 --> 00:08:29.920 on serving isolated farmers via mail, is suddenly 00:08:29.920 --> 00:08:32.379 under threat. It's facing an existential crisis. 00:08:32.879 --> 00:08:35.200 If your customers are all moving to the city, 00:08:35.279 --> 00:08:38.059 they don't need your catalog. Go to a store. 00:08:38.240 --> 00:08:40.179 But Wood's insight was that they weren't going 00:08:40.179 --> 00:08:43.639 to the right kind of store. Exactly. The big 00:08:43.639 --> 00:08:46.519 fancy department stores of the day, your Macy's, 00:08:46.620 --> 00:08:49.419 your Marshall Fields, were all downtown. They 00:08:49.419 --> 00:08:52.200 were these grand, multi -story palaces built 00:08:52.200 --> 00:08:54.539 for people who arrived by streetcar or on foot. 00:08:54.740 --> 00:08:57.019 They were urban cathedrals of consumption. Right. 00:08:57.080 --> 00:08:59.779 And Wood looked at the data and said, no, that's 00:08:59.779 --> 00:09:02.120 not the future. He realized the working class 00:09:02.120 --> 00:09:04.179 wasn't living downtown. They were living in neighborhoods 00:09:04.179 --> 00:09:06.990 further out. And they were driving. He said, 00:09:07.029 --> 00:09:08.509 we're not going to build where the rich people 00:09:08.509 --> 00:09:10.350 shop. We're going to build where our customers 00:09:10.350 --> 00:09:12.529 live. And we're going to build for the automobile. 00:09:12.850 --> 00:09:16.090 Which meant one thing above all else. The parking 00:09:16.090 --> 00:09:18.950 lot. It sounds so incredibly basic now. Of course, 00:09:18.970 --> 00:09:22.009 a store has a parking lot. But in 1925, it was 00:09:22.009 --> 00:09:25.710 revolutionary to dedicate a huge, valuable piece 00:09:25.710 --> 00:09:31.120 of land to just storing cars for free. was a 00:09:31.120 --> 00:09:33.720 radical idea. Competitors thought he was insane. 00:09:33.919 --> 00:09:35.820 But he was betting everything on the car, and 00:09:35.820 --> 00:09:38.279 he was absolutely right. The first Sears retail 00:09:38.279 --> 00:09:41.019 store opened as an experiment in their Chicago 00:09:41.019 --> 00:09:45.519 catalog plant in 1925. It was a madhouse. An 00:09:45.519 --> 00:09:47.700 instant success. And they didn't just innovate 00:09:47.700 --> 00:09:49.399 on the outside of the store, they changed the 00:09:49.399 --> 00:09:52.299 inside too. The sources mention these windowless 00:09:52.299 --> 00:09:55.299 stores in the 1930s. That sounds kind of grim. 00:09:55.460 --> 00:09:57.600 It sounds like a bunker, but it was pure efficiency. 00:09:58.220 --> 00:10:00.460 Think about it. If you have no windows, you gain 00:10:00.460 --> 00:10:02.720 all that wall space for shelves. You control 00:10:02.720 --> 00:10:04.860 the lighting completely so every product looks 00:10:04.860 --> 00:10:06.799 perfect. And this is the big one in the 30s. 00:10:06.799 --> 00:10:09.360 You can air condition the entire space. You create 00:10:09.360 --> 00:10:11.779 a self -contained world. A hermetically sealed 00:10:11.779 --> 00:10:14.320 temple of commerce where the only thing that 00:10:14.320 --> 00:10:16.500 matters is what's on the shelves. It's the logic 00:10:16.500 --> 00:10:19.080 casinos use but applied to retail. They were 00:10:19.080 --> 00:10:20.779 the first to do it. And they also tore down the 00:10:20.779 --> 00:10:24.419 walls between departments, right? Yes. Before 00:10:24.419 --> 00:10:26.940 Sears, a store was like a collection of little 00:10:26.940 --> 00:10:29.639 shops under one roof. The shoe department was 00:10:29.639 --> 00:10:31.940 its own world. The men's department was separate. 00:10:32.080 --> 00:10:35.299 Sears created the first truly open plan selling 00:10:35.299 --> 00:10:38.000 floor. So the hardware section could flow right 00:10:38.000 --> 00:10:40.279 into sporting goods, which flowed into automotive. 00:10:40.940 --> 00:10:43.240 It was designed to encourage browsing, to make 00:10:43.240 --> 00:10:45.299 you wander and discover things you didn't even 00:10:45.299 --> 00:10:47.860 know you needed. It's the blueprint for Target, 00:10:48.019 --> 00:10:50.649 right? For Walmart. For every big box store that 00:10:50.649 --> 00:10:53.090 came after. It is the blueprint. And they used 00:10:53.090 --> 00:10:55.950 this model to conquer the suburbs. After World 00:10:55.950 --> 00:10:59.110 War II, as the suburbs exploded, Sears was right 00:10:59.110 --> 00:11:01.690 there. They became the anchor tenant that made 00:11:01.690 --> 00:11:04.309 the American shopping mall possible. If Sears 00:11:04.309 --> 00:11:06.210 didn't agree to open a store in your new mall, 00:11:06.429 --> 00:11:08.429 the developer couldn't get the financing to build 00:11:08.429 --> 00:11:10.629 it. They were that powerful. And they built their 00:11:10.629 --> 00:11:13.950 own universe of brands. Kenmore Appliances, Craftsman 00:11:13.950 --> 00:11:17.710 Tools in 1927, Diehard Batteries in 67. Vertical 00:11:17.710 --> 00:11:19.549 integration at its finest. They didn't just sell 00:11:19.549 --> 00:11:21.350 you a wrench. They sold you a Craftsman wrench 00:11:21.350 --> 00:11:23.710 with a lifetime guarantee. They didn't just sell 00:11:23.710 --> 00:11:26.549 insurance. They founded Allstate in 1931 and 00:11:26.549 --> 00:11:29.110 literally put the insurance agents at desks inside 00:11:29.110 --> 00:11:31.789 the stores. So you could buy a new set of tires, 00:11:32.049 --> 00:11:34.929 get a Diehard Battery, and get them insured with 00:11:34.929 --> 00:11:36.990 Allstate all without leaving the building. It 00:11:36.990 --> 00:11:39.009 was an ecosystem. They owned every part of the 00:11:39.009 --> 00:11:41.110 American dream, from the lawnmower to the life 00:11:41.110 --> 00:11:43.470 insurance policy. And the ultimate symbol of 00:11:43.470 --> 00:11:46.210 that power was the Sears Tower, completed in 00:11:46.210 --> 00:11:49.509 1974. At the time, the tallest building in the 00:11:49.509 --> 00:11:52.309 world. And when you look at the timeline, 1974, 00:11:52.690 --> 00:11:55.129 that's it, isn't it? That's the absolute peak. 00:11:55.389 --> 00:11:58.149 That is the summit. And there's a concept in 00:11:58.149 --> 00:12:00.509 business called the edifice complex. It's this 00:12:00.509 --> 00:12:03.409 theory that as soon as a company... builds a 00:12:03.409 --> 00:12:06.830 massive, record -breaking headquarters as a monument 00:12:06.830 --> 00:12:09.789 to its own success, it's usually a sign that 00:12:09.789 --> 00:12:11.889 the decline is about to begin. Because they've 00:12:11.889 --> 00:12:13.730 stopped looking out at the customer and started 00:12:13.730 --> 00:12:16.250 looking in the mirror. Exactly. And that brings 00:12:16.250 --> 00:12:19.090 us to the 1980s and the beginning of the great 00:12:19.090 --> 00:12:21.730 unraveling. It wasn't a sudden crash. It was 00:12:21.730 --> 00:12:24.649 a slow, creeping drift into confusion. This is 00:12:24.649 --> 00:12:27.809 the socks and stocks era. Socks and stocks. The 00:12:27.809 --> 00:12:29.710 leadership at Sears looked at their core retail 00:12:29.710 --> 00:12:32.620 business and thought, this is boring. The margins 00:12:32.620 --> 00:12:35.299 are thin. They got seduced by the high -flying 00:12:35.299 --> 00:12:37.480 world of finance. So instead of trying to sell 00:12:37.480 --> 00:12:40.139 more jeans, they decided to sell, what, mutual 00:12:40.139 --> 00:12:43.000 funds? Exactly that. They went on a buying spree. 00:12:43.059 --> 00:12:46.419 They bought Dean Witter, a major stock brokerage. 00:12:46.539 --> 00:12:48.919 They bought Coldwell Banker, the real estate 00:12:48.919 --> 00:12:51.120 giant. And they launched their own credit card, 00:12:51.340 --> 00:12:54.360 the Discover card. I mean, I can almost see the 00:12:54.360 --> 00:12:56.720 logic on a PowerPoint slide. You buy your house 00:12:56.720 --> 00:12:58.720 with Coldwell Banker, you insure it with Allstate, 00:12:58.799 --> 00:13:00.720 you fill it with Kenmore appliances from Sears, 00:13:00.759 --> 00:13:02.879 and you put it all on your Discover card. It's 00:13:02.879 --> 00:13:06.080 the lifecycle pitch. It was pitched as the great 00:13:06.080 --> 00:13:09.460 American financial network. But the reality was 00:13:09.460 --> 00:13:12.320 it was a catastrophic distraction. Retail is 00:13:12.320 --> 00:13:14.899 a daily ground war. It's about pricing, inventory, 00:13:15.360 --> 00:13:18.840 customer service, store cleanliness. It requires 00:13:18.840 --> 00:13:22.059 relentless focus. And the CEO can't be focused 00:13:22.059 --> 00:13:24.019 on that if he's worried about interest rate spreads 00:13:24.019 --> 00:13:26.679 and the real estate market in California. Precisely. 00:13:26.679 --> 00:13:28.799 While the top executives were playing Wall Street, 00:13:29.019 --> 00:13:31.539 the actual stores, the things generating the 00:13:31.539 --> 00:13:33.980 cash, were being neglected. The paint started 00:13:33.980 --> 00:13:36.919 to peel. The carpets got worn. The product mix 00:13:36.919 --> 00:13:39.340 got stale. And while Sears was looking the other 00:13:39.340 --> 00:13:42.059 way, the competition was getting fierce. Oh, 00:13:42.080 --> 00:13:44.799 the sharks were circling. Sam Walton was building 00:13:44.799 --> 00:13:47.039 a logistics machine at Walmart that made Sears 00:13:47.039 --> 00:13:49.759 look ancient. Home Depot was creating a warehouse 00:13:49.759 --> 00:13:52.259 model for hardware that made the Sears tool department 00:13:52.259 --> 00:13:55.720 look like a tiny closet. Best Buy did the same 00:13:55.720 --> 00:13:57.759 for electronics. They were being carved up by 00:13:57.759 --> 00:14:01.210 these category killers. Piece by piece. And then 00:14:01.210 --> 00:14:04.750 in 1990, the unthinkable happened. Walmart officially 00:14:04.750 --> 00:14:08.110 surpassed Sears as the largest retailer in the 00:14:08.110 --> 00:14:10.350 United States. And just three years after that, 00:14:10.409 --> 00:14:14.169 in 1993, they make what might be the single worst 00:14:14.169 --> 00:14:16.830 business decision of the 20th century. They kill 00:14:16.830 --> 00:14:19.690 the catalog. They discontinue the big book. After 00:14:19.690 --> 00:14:21.990 100 years. Let's just frame the timing here. 00:14:22.090 --> 00:14:24.429 They shut down their mail order business in 1993. 00:14:25.080 --> 00:14:27.720 Jeff Bezos incorporates a company called Cadabra 00:14:27.720 --> 00:14:30.240 Inc., which would later be renamed Amazon in 00:14:30.240 --> 00:14:33.679 1994. It's the ultimate what if. It's just it's 00:14:33.679 --> 00:14:35.700 painful to think about. Sears had everything. 00:14:35.860 --> 00:14:37.960 They had the warehouses, the trucks, the customer 00:14:37.960 --> 00:14:40.539 data, the brand trust. They had a hundred year 00:14:40.539 --> 00:14:42.519 head start on Amazon. If they had just taken 00:14:42.519 --> 00:14:44.320 that catalog infrastructure and put it online, 00:14:44.580 --> 00:14:46.919 we would all be Sears Prime members today. There 00:14:46.919 --> 00:14:49.539 would be no Amazon. But they saw it as a cost, 00:14:49.659 --> 00:14:52.279 a legacy business to be cut. They were managing 00:14:52.279 --> 00:14:54.360 for the next quarter's earnings report, not for 00:14:54.360 --> 00:14:57.080 the next decade's economy. They saved a few million 00:14:57.080 --> 00:14:59.000 dollars printing and mailing books, and in doing 00:14:59.000 --> 00:15:01.019 so, they threw away a trillion -dollar future. 00:15:01.379 --> 00:15:04.179 And on top of that, the trust they had built 00:15:04.179 --> 00:15:06.899 for a century was starting to crack. The auto 00:15:06.899 --> 00:15:10.139 center scandal in 1992 was a huge blow. It was 00:15:10.139 --> 00:15:12.919 a disaster for the brand. The state of California 00:15:12.919 --> 00:15:15.639 sued them, and the investigation found that Sears 00:15:15.639 --> 00:15:18.379 Auto Centers were systematically ripping off 00:15:18.379 --> 00:15:21.460 customers. What were they doing? They had put 00:15:21.460 --> 00:15:23.519 their mechanics on a commission and quota system. 00:15:24.059 --> 00:15:26.899 Management told them, you need to sell, for example, 00:15:27.039 --> 00:15:29.720 five brake jobs per shift to hit your numbers. 00:15:30.019 --> 00:15:32.360 So suddenly every car that rolls in for an oil 00:15:32.360 --> 00:15:35.019 change mysteriously needs new brakes. You got 00:15:35.019 --> 00:15:37.299 it. They incentivized fraud. They settled the 00:15:37.299 --> 00:15:40.759 lawsuit for about $46 million, but the real damage 00:15:40.759 --> 00:15:43.759 was to their reputation. The entire brand was 00:15:43.759 --> 00:15:46.000 built on the phrase, satisfaction guaranteed 00:15:46.000 --> 00:15:49.320 or your money back. Suddenly that promise felt 00:15:49.320 --> 00:15:51.720 hollow. So they spend the rest of the 90s trying 00:15:51.720 --> 00:15:54.340 to right the ship. They spin off Allstate, Dean 00:15:54.340 --> 00:15:57.159 Witter, Discover. They try to get back to basics. 00:15:57.539 --> 00:16:00.500 But it's too late. And that brings us to 2004 00:16:00.500 --> 00:16:04.080 and the deal that seals their fate. Kmart buys 00:16:04.080 --> 00:16:07.379 Sears. Well, technically. But it's more accurate 00:16:07.379 --> 00:16:09.460 to say that a hedge fund manager named Eddie 00:16:09.460 --> 00:16:12.379 Lampert, who controlled Kmart after its own bankruptcy, 00:16:12.720 --> 00:16:17.019 used Kmart as a vehicle to acquire Sears. This 00:16:17.019 --> 00:16:19.200 is the moment we enter the hedge fund era, and 00:16:19.200 --> 00:16:20.980 I really want to break this down for our listeners. 00:16:21.259 --> 00:16:24.600 What does it actually mean in practice to run 00:16:24.600 --> 00:16:27.259 a retail company like a hedge fund? It's a fundamental 00:16:27.259 --> 00:16:30.100 difference in philosophy. A traditional retailer, 00:16:30.159 --> 00:16:32.220 a merchant, believes in investing money back 00:16:32.220 --> 00:16:34.419 into the business. You spend money on capital 00:16:34.419 --> 00:16:36.919 expenditures, capex. You renovate stores. You 00:16:36.919 --> 00:16:38.679 update your technology. You train your employees. 00:16:38.879 --> 00:16:41.440 You spend money today to hopefully make more 00:16:41.440 --> 00:16:43.830 money tomorrow. Okay, that makes sense. A hedge 00:16:43.830 --> 00:16:45.730 fund manager, particularly one like Lampert, 00:16:45.889 --> 00:16:48.809 is obsessed with capital allocation. Their only 00:16:48.809 --> 00:16:51.710 question is, where can I put this dollar right 00:16:51.710 --> 00:16:54.429 now to get the highest possible immediate return 00:16:54.429 --> 00:16:56.690 for shareholders? So if renovating the store 00:16:56.690 --> 00:16:59.309 gives you a 2 % return, but buying back your 00:16:59.309 --> 00:17:01.830 own stock juices the share price and gives you 00:17:01.830 --> 00:17:04.009 a 5 % return. You don't fix the leaking roof, 00:17:04.150 --> 00:17:07.299 you buy the stock. And that is precisely what 00:17:07.299 --> 00:17:11.220 happened. From 2005 to 2010, Sears Holdings spent 00:17:11.220 --> 00:17:16.019 over $5 billion on stock buybacks. $5 billion. 00:17:16.160 --> 00:17:18.480 They could have rebuilt every store in the country 00:17:18.480 --> 00:17:21.059 for that. They could have. But instead, they 00:17:21.059 --> 00:17:23.779 used that cash to artificially inflate the stock 00:17:23.779 --> 00:17:26.180 price, making the company look healthy on Wall 00:17:26.180 --> 00:17:28.980 Street while the actual stores were visibly decaying. 00:17:29.339 --> 00:17:31.200 Customers would walk in and see peeling paint, 00:17:31.279 --> 00:17:33.079 burnt out light bulbs, disorganized shelves. 00:17:33.259 --> 00:17:35.220 It felt like walking into a time capsule from 00:17:35.220 --> 00:17:37.799 1985. And here's the statistic from the sources 00:17:37.799 --> 00:17:40.759 that just floors me. In the third quarter of 00:17:40.759 --> 00:17:43.759 2006, one third of the company's entire pre -tax 00:17:43.759 --> 00:17:46.720 income came from financial trades, not from selling 00:17:46.720 --> 00:17:49.019 washing machines. Correct. They were making complex 00:17:49.019 --> 00:17:51.839 derivative bets, total return swaps. They were 00:17:51.839 --> 00:17:54.099 using the company's cash flow as collateral to 00:17:54.099 --> 00:17:56.079 function as a speculative investment fund. So 00:17:56.079 --> 00:17:57.859 it was a hedge fund with a department store attached 00:17:57.859 --> 00:18:00.019 as a sort of... cash generating side hustle. 00:18:00.180 --> 00:18:02.980 That's a very good way to put it. And it worked 00:18:02.980 --> 00:18:04.680 for a little while, as long as the market was 00:18:04.680 --> 00:18:07.339 going up. But when the 2008 financial crisis 00:18:07.339 --> 00:18:10.400 hit, those bets went sour. And because they'd 00:18:10.400 --> 00:18:13.140 starved the retail side for years, there was 00:18:13.140 --> 00:18:15.559 nothing left to fall back on. So the profits 00:18:15.559 --> 00:18:18.380 vanish. The stores are crumbling. What's the 00:18:18.380 --> 00:18:21.259 next move? You start selling off the family silver. 00:18:21.799 --> 00:18:24.500 This begins the period we call the asset strip. 00:18:24.660 --> 00:18:27.440 If the core business isn't making money. You 00:18:27.440 --> 00:18:29.480 start selling off the valuable pieces of the 00:18:29.480 --> 00:18:32.220 company to generate cash to cover the losses. 00:18:32.480 --> 00:18:35.640 They spun off Land's End in 2014. They sold their 00:18:35.640 --> 00:18:38.279 stake in Sears Canada, which then went bankrupt. 00:18:38.559 --> 00:18:41.059 And then, the one that really hurt the loyalists, 00:18:41.160 --> 00:18:44.359 in 2017, they sold the Craftsman brand. That 00:18:44.359 --> 00:18:46.680 feels like the point of no return. Craftsman 00:18:46.680 --> 00:18:49.640 was Sears for generations of American men. It 00:18:49.640 --> 00:18:51.319 was the heart of the company for so many people. 00:18:51.519 --> 00:18:53.660 They sold it to Stanley Black & Decker for about 00:18:53.660 --> 00:18:57.079 $900 million. Once that was gone, What was the 00:18:57.079 --> 00:18:59.160 reason to even go to Sears anymore? But the most 00:18:59.160 --> 00:19:01.259 controversial deal, the one that led to lawsuits, 00:19:01.500 --> 00:19:03.500 was about the real estate. Can you walk us through 00:19:03.500 --> 00:19:06.079 the Saradage deal? It's a bit complicated. It 00:19:06.079 --> 00:19:08.480 is, but it's critical to understanding the endgame. 00:19:08.940 --> 00:19:12.240 So, Sears owned hundreds of its own stores, the 00:19:12.240 --> 00:19:14.779 land and the buildings. This was their single 00:19:14.779 --> 00:19:19.019 most valuable asset. Okay. In 2015, Lampert orchestrated 00:19:19.019 --> 00:19:21.519 a plan to unlock the value of that real estate. 00:19:21.680 --> 00:19:24.779 He created a new separate company called Seritage 00:19:24.779 --> 00:19:27.039 Growth Properties. It's a type of company called 00:19:27.039 --> 00:19:30.059 a REIT, a real estate investment trust. So a 00:19:30.059 --> 00:19:33.160 company that just owns property. Exactly. Then... 00:19:33.339 --> 00:19:36.799 Sears, the retail company, sold 235 of its best, 00:19:36.819 --> 00:19:39.680 most valuable properties to Seritage, this new 00:19:39.680 --> 00:19:41.880 company. And the catch was? The catch was that 00:19:41.880 --> 00:19:43.640 Eddie Lampert was the chairman of Sears, the 00:19:43.640 --> 00:19:46.039 seller, and he was also the primary investor 00:19:46.039 --> 00:19:48.099 and chairman of Seritage, the buyer. So he was 00:19:48.099 --> 00:19:49.779 effectively on both sides of the transaction. 00:19:50.019 --> 00:19:52.400 He was selling the assets to himself. That was 00:19:52.400 --> 00:19:54.299 the allegation in the shareholder lawsuits that 00:19:54.299 --> 00:19:56.819 followed. They claimed he engineered the deal 00:19:56.819 --> 00:19:58.779 to sell the properties too cheaply to his own 00:19:58.779 --> 00:20:01.180 new company. But the operational consequence 00:20:01.180 --> 00:20:05.420 was even worse. Sears got a one -time cash infusion 00:20:05.420 --> 00:20:07.720 from the sale, which it used to pay down debt. 00:20:08.119 --> 00:20:10.819 But then to keep operating in those same stores, 00:20:11.059 --> 00:20:13.960 it had to start paying rent to Saradich. So they 00:20:13.960 --> 00:20:16.779 traded a massive asset owning their own buildings 00:20:16.779 --> 00:20:19.480 for a massive liability, a monthly rent check. 00:20:19.740 --> 00:20:22.599 Yes. And it created this perverse incentive. 00:20:23.039 --> 00:20:25.339 If a Sears store was struggling and went out 00:20:25.339 --> 00:20:27.859 of business, it was actually good for Saradich. 00:20:28.119 --> 00:20:30.859 They could then evict the failing Sears. tear 00:20:30.859 --> 00:20:33.599 the building down and release the valuable land 00:20:33.599 --> 00:20:35.579 to someone like a Whole Foods or a luxury apartment 00:20:35.579 --> 00:20:38.259 developer for much higher rent. So the real estate 00:20:38.259 --> 00:20:40.680 company he controlled was positioned to profit 00:20:40.680 --> 00:20:43.119 from the failure of the retail company he also 00:20:43.119 --> 00:20:45.259 controlled. That was the argument the creditors 00:20:45.259 --> 00:20:47.680 made in bankruptcy court. They called it serial 00:20:47.680 --> 00:20:50.299 assets tripping. They said the company wasn't 00:20:50.299 --> 00:20:51.839 being turned around, it was being systematically 00:20:51.839 --> 00:20:54.460 dismantled for parts. And while all this is happening, 00:20:54.579 --> 00:20:56.299 the company is burning through billions. The 00:20:56.299 --> 00:20:59.079 Shop Your Way loyalty program was a money pit, 00:20:59.220 --> 00:21:02.259 right? A complete disaster. They lost $10 .4 00:21:02.259 --> 00:21:06.220 billion between 2011 and 2016. They were trying 00:21:06.220 --> 00:21:07.880 to become a tech company, a membership club, 00:21:08.079 --> 00:21:11.240 but the execution was awful and customers were 00:21:11.240 --> 00:21:13.019 just confused. And what about the employees, 00:21:13.180 --> 00:21:15.039 the people who had been there for decades? It 00:21:15.039 --> 00:21:17.000 was a nightmare for them. constant commission 00:21:17.000 --> 00:21:20.200 cuts, store closures with little notice. But 00:21:20.200 --> 00:21:22.500 the most brutal part was the attack on the retirees. 00:21:22.799 --> 00:21:25.759 In 2019, after the bankruptcy, the company moved 00:21:25.759 --> 00:21:28.140 to terminate the life insurance benefits for 00:21:28.140 --> 00:21:31.279 its retired employees. These are people who gave 00:21:31.279 --> 00:21:33.940 their entire careers to the company. The 30, 00:21:33.980 --> 00:21:36.480 40 years. And at the very same time they were 00:21:36.480 --> 00:21:39.140 cutting off these retirees, court filings show 00:21:39.140 --> 00:21:41.680 they were handing out $25 million in bonuses 00:21:41.680 --> 00:21:43.960 to their top executives. The optics of that are 00:21:43.960 --> 00:21:47.380 just... It cemented the narrative that this was 00:21:47.380 --> 00:21:49.559 a salvage operation for the people at the top, 00:21:49.579 --> 00:21:51.980 not a rescue mission for the company. Which brings 00:21:51.980 --> 00:21:54.940 us to the final chapter. October 15th, 2018, 00:21:55.319 --> 00:21:58.059 they file for Chapter 11 bankruptcy. They couldn't 00:21:58.059 --> 00:22:00.480 make $134 million debt payment that was due. 00:22:00.599 --> 00:22:03.460 The game was up. Lampert stepped down as CEO, 00:22:03.660 --> 00:22:06.059 but crucially remained as chairman of the board. 00:22:06.410 --> 00:22:09.210 And then came this bizarre bankruptcy auction 00:22:09.210 --> 00:22:12.569 in early 2019. It wasn't a normal sale. No, it 00:22:12.569 --> 00:22:15.390 was high drama. The company was on the verge 00:22:15.390 --> 00:22:18.410 of total liquidation, meaning every single store 00:22:18.410 --> 00:22:21.509 would close immediately. Then at the last minute, 00:22:21.670 --> 00:22:24.589 Lampert himself, through his hedge fund ESL investments, 00:22:24.890 --> 00:22:28.309 came in with a $5 .2 billion bid to buy the remaining 00:22:28.309 --> 00:22:31.910 assets out of bankruptcy and keep about 425 stores 00:22:31.910 --> 00:22:35.259 open. And the creditors, the banks, the suppliers, 00:22:35.519 --> 00:22:37.940 everyone Sears earned money to, they fought him 00:22:37.940 --> 00:22:40.779 on it. They were apoplectic. They argued directly 00:22:40.779 --> 00:22:42.599 to the judge that Lampert should not be allowed 00:22:42.599 --> 00:22:44.980 to buy the company. Their position was essentially, 00:22:45.160 --> 00:22:47.259 this man drove the car off the cliff and now 00:22:47.259 --> 00:22:48.920 you're going to sell him the wreckage for pennies 00:22:48.920 --> 00:22:51.039 on the dollar, just liquidate it and give us 00:22:51.039 --> 00:22:53.019 what's left. But the judge approved the sale. 00:22:53.200 --> 00:22:55.400 He did, primarily on the argument that it would 00:22:55.400 --> 00:22:58.680 save, at least temporarily, about 45 ,000 jobs. 00:22:59.019 --> 00:23:01.519 So the new Sears is born under a new corporate 00:23:01.519 --> 00:23:05.029 name. TransformCo. It sounds like a generic evil 00:23:05.029 --> 00:23:07.410 corporation from a movie. It really does. And 00:23:07.410 --> 00:23:09.349 the transformation has really just been a slow 00:23:09.349 --> 00:23:12.230 managed decline ever since. We call it the slow 00:23:12.230 --> 00:23:14.750 death. It's just been a steady drip of closures. 00:23:14.930 --> 00:23:17.549 In 2021, the last store in their home state of 00:23:17.549 --> 00:23:20.049 Illinois closed. At the Woodfield Mall, their 00:23:20.049 --> 00:23:24.089 flagship, gone. In 2022, the last of the Sears 00:23:24.089 --> 00:23:27.289 Auto Center's shut down for good. 2023, they 00:23:27.289 --> 00:23:30.109 pulled out of five more states entirely. And 00:23:30.109 --> 00:23:33.650 then came the final symbolic blow. The headquarters. 00:23:33.950 --> 00:23:36.210 The massive campus in Hoffman Estates, Illinois. 00:23:36.450 --> 00:23:39.619 A symbol of their suburban dominance. In August 00:23:39.619 --> 00:23:42.599 of 2024, the demolition crews moved in. They 00:23:42.599 --> 00:23:44.359 started tearing it down. And what are they building 00:23:44.359 --> 00:23:46.440 in its place? Data centers. You couldn't write 00:23:46.440 --> 00:23:48.579 a more perfect metaphor. The physical retail 00:23:48.579 --> 00:23:51.160 giant is being bulldozed to make way for the 00:23:51.160 --> 00:23:53.759 server farms that power the digital economy that 00:23:53.759 --> 00:23:56.059 killed it. It is the perfect tombstone for the 00:23:56.059 --> 00:23:58.339 20th century American corporation. Which brings 00:23:58.339 --> 00:24:01.980 us right back to today. August 2025, the last 00:24:01.980 --> 00:24:05.000 store in Puerto Rico closes. December 2025, we 00:24:05.000 --> 00:24:07.640 hit the final number. Five stores left. Sears 00:24:07.640 --> 00:24:10.039 .com still exists, but it's basically just a 00:24:10.039 --> 00:24:11.920 marketplace for other people to sell their stuff. 00:24:12.079 --> 00:24:15.420 It's a ghost ship. So let's try to synthesize 00:24:15.420 --> 00:24:18.160 all of this. We started with a station agent 00:24:18.160 --> 00:24:20.960 selling watches, and we've ended with five stores 00:24:20.960 --> 00:24:23.259 and a data center being built on the rubble of 00:24:23.259 --> 00:24:25.519 their headquarters. What is the grand takeaway? 00:24:25.819 --> 00:24:27.640 I think you have to see it as a story in two 00:24:27.640 --> 00:24:31.299 acts. Act one is a century of relentless. Brilliant 00:24:31.299 --> 00:24:33.759 innovation. They figured out the supply chain. 00:24:33.900 --> 00:24:37.440 They invented satisfaction guaranteed. They perfected 00:24:37.440 --> 00:24:40.079 the suburban retail experience. They knew their 00:24:40.079 --> 00:24:42.339 customer better than anyone on earth. And act 00:24:42.339 --> 00:24:44.799 two. Act two is what happens when a company falls 00:24:44.799 --> 00:24:46.700 in love with financial engineering instead of 00:24:46.700 --> 00:24:49.079 its customers. They stopped trying to innovate 00:24:49.079 --> 00:24:51.059 in the aisles and started trying to innovate 00:24:51.059 --> 00:24:53.799 on the balance sheet. They forgot the why serving 00:24:53.799 --> 00:24:56.420 the American family and focused only on though. 00:24:56.920 --> 00:24:58.900 The assets, the stock price, the real estate. 00:24:59.039 --> 00:25:01.640 They started treating the company not as a living 00:25:01.640 --> 00:25:04.480 organism to be nurtured, but as a pile of assets 00:25:04.480 --> 00:25:07.519 to be liquidated. Precisely. And the ultimate 00:25:07.519 --> 00:25:10.259 lesson of Sears is that you cannot financialize 00:25:10.259 --> 00:25:12.700 your way into a customer's heart. You can play 00:25:12.700 --> 00:25:14.920 games with the stock price for a while. You can 00:25:14.920 --> 00:25:17.339 extract value for a few years. But eventually 00:25:17.339 --> 00:25:20.079 the customer walks in, sees the leaking roof 00:25:20.079 --> 00:25:22.940 and the empty shelves, and they just... They 00:25:22.940 --> 00:25:24.819 stopped coming back. It's an incredible sobering 00:25:24.819 --> 00:25:26.880 story. But I want to leave our listeners with 00:25:26.880 --> 00:25:29.900 one final thought. The big what if. Sears Prime. 00:25:30.079 --> 00:25:32.759 Sears Prime. They had the warehouses. They had 00:25:32.759 --> 00:25:35.019 the trucks. They had the customer list. They 00:25:35.019 --> 00:25:39.519 had the consumer's Bible. If in 1994 they had 00:25:39.519 --> 00:25:41.799 embraced the Internet with the same ferocity 00:25:41.799 --> 00:25:44.279 that Robert E. Wood embraced the automobile in 00:25:44.279 --> 00:25:46.880 1925. We wouldn't be talking about Jeff Bezos 00:25:46.880 --> 00:25:49.119 today. We'd be getting two day shipping on our 00:25:49.119 --> 00:25:51.440 craftsman tools from Sears. They had a century 00:25:51.440 --> 00:25:53.680 long head start. start and they just let it all 00:25:53.680 --> 00:25:55.039 slip away because they were looking at the wrong 00:25:55.039 --> 00:25:58.440 spreadsheets. And that leads to the final provocative 00:25:58.440 --> 00:26:01.039 question for you listening right now. Who is 00:26:01.039 --> 00:26:04.220 the Sears of today? Which corporate giant is 00:26:04.220 --> 00:26:06.319 sitting at its absolute peak in its gleaming 00:26:06.319 --> 00:26:09.140 new headquarters, so focused on stock buybacks 00:26:09.140 --> 00:26:11.180 and financial maneuvering that it doesn't see 00:26:11.180 --> 00:26:13.119 the world changing right under its feet? That's 00:26:13.119 --> 00:26:15.339 the question that should keep every CEO in America 00:26:15.339 --> 00:26:18.519 up at night. Because as Sears proves, no empire 00:26:18.519 --> 00:26:19.299 is forever.