Ill-Conceived Signs Aren’t Nearly the Worst Thing About Sears Stock

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Sears stock - Ill-Conceived Signs Aren’t Nearly the Worst Thing About Sears Stock

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In light of the slow-motion (and sometimes not-so-slow) trainwreck it’s become, nothing Sears Holdings Corp (NASDAQ:SHLD) does anymore is truly shocking to the few lingering owners of Sears stock still around.

And yet, the struggling retailer still manages to find ways to sink to new lows.

The latest chapter in the sordid saga? Hand-written signs showing the sale price of its merchandise.

OK, it’s not the end of the world. Indeed, if it’s a way of cutting costs, such a decision was almost inevitable.

In a world where its competitors moving forward rather than backward with in-store presentation, though, you can add this one to a long list of things that are dragging the company into the mire of irrelevance.

Misguided Move

The pictures were first posted on Wednesday, and thus far have only been reported for one store in Virginia. It’s unlikely, however, that the initiative is limited to just one store, even if it’s only an experiment or pilot program.

On the surface, no big deal. A sign is a sign, and though something machine-printed would certainly look cleaner and more planned, there’s arguably a little bit of charm to the idea.

But only a little.

The several signs that Business Insider posted made it clear that there was no particular standard or uniformity to the approach. Some signs were messy. Other signs were confusing. Still other signs were just plain strange.

Mostly though, owners of Sears stock will lament the fact that the hand-written signs looked like they were rolled out without a specific plan or clear vision.

That’s not to suggest rival retailers like Walmart Inc (NYSE:WMT) or J C Penney Company Inc (NYSE:JCP) have never used a hand-printed sign; they almost certainly have.

It is to say, however, that hand-printed signage from other retailers is an exception to the norm rather than the new norm.

The inexplicable aspect? If the aim is to save money or time, this initiative may not actually do either.

Each store could own its own computer and laser printer (if they don’t already) for a few hundred bucks, and surely someone in the building could be spared for a while to just make signs.

The (Hand) Writing is On the Wall

With just a quick glance the rollout of hand-written signs seems like yet-another problem for Sears. In a bigger-picture sense though, it’s as much a symptom of a problem as it is a problem.

Simply put, Sears Holdings, the parent company of Sears as well as K-Mart, is being flown by the seat of the CEO’s pants.

That CEO is Eddie Lampert, by the way; the hedge-fund manager and major investor in Sears stock who named himself as chief back in early 2013.

At the time he was certain he was better suited than any other person in the country to steer the retailer out of the trouble.

That trouble was, among other things, the largely-ignored advent of Amazon.com, Inc. (NASDAQ:AMZN) and other online-shopping alternatives.

Just as problematic, however, was that Sears missed how lazy it had become in terms of creating inviting store environments.

Oh yeah, and Lampert hadn’t a shred of retailing experience.

End result? Revenue has continued to decline as it has  every year since 2006. Now, the pace of that deterioration seems to be accelerating.

The company hasn’t turned a full-year profit since 2011, with no end to that trend in sight.

It’s only remained afloat by selling off pieces of itself, but that only exacerbates the problem in that it shed assets that bear much-needed revenue.

The only real “fix” for Sears was, and still is, selling more merchandise to more consumers at profitable prices. That’s the one thing the company hasn’t really, truly given much thought.

If anything, hand-written signs are another step in the opposite direction. They look a little flea-market-ish.

Bottom Line for Sears Stock

Maybe the hand-printed signs were simply a one-off at one store. Perhaps a piece of equipment broken.

It’s possible the store in Virginia was supposed to receive sale signs in the mail, but they never arrived. If that’s the case, then it’s all a non-issue.

Owners of Sears stock may want to keep their eyes and ears open for hand-printed signs at other stores though, as it may well become a company-wide thing.

If it does, mark it as another step toward the retailer’s inevitable doom.

Again though, that fate was sealed long before the new ad-hoc signage surfaced.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.


Article printed from InvestorPlace Media, https://investorplace.com/2018/06/ill-conceived-signs-arent-nearly-the-worst-thing-about-sears-stock/.

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