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Why Sears Will Never Be Great Again

In the following video, Fool analysts Austin Smith and Jeremy Phillips look at Sears Holdings' (NASDAQ: SHLD  ) Sears stores and talk about why Sears will never again be the great company it once was.

For quite a while, investors have looked at Sears as a real-estate play with a genius hedge-fund manager at the helm, turning things around, Jeremy says. But that hasn't happened. And he doesn't see the situation changing.

Sears was an innovative company for a long time. It literally invented the catalog, and in the 1920s, it was shipping kits for houses to be built.

But Sears won't be great again, Austin says. He argues that what the company has done is amazing, but it doesn't have the pieces in place to return to greatness.

Austin also says the real-estate play on Sears is misunderstood. Many believe its assets are undervalued. Austin disagrees.

And while management has tried to run the company like a hedge fund, it hasn't worked, because the company is a retailer and needs to be run with the customer in mind, Austin says.

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Comments from our Foolish Readers

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  • Report this Comment On March 17, 2013, at 11:23 AM, KevinniveK wrote:

    All true, but 3 years later than when most casual investors already knew this. Useless input at this juncture.

  • Report this Comment On March 17, 2013, at 4:18 PM, jasonrothman1 wrote:

    You have to "care about customer service?" I'm told from somebody who used to work for Sears that they've been working heavily on this, by eliminating most of the dept. managers and full-time work force in order to have their part-timers (mostly high school kids) to "step up to the plate" and generate those much needed sales.

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