The deals CEO Eddie Lampert has made for Sears Holdings Corp (NASDAQ:SHLDQ) in 2017 show what a crying shame it is he wasn't as innovative earlier.
Sears recently announced two more deals for its Kenmore and DieHard brands, partnering with Cleva North America to produce Kenmore vacuums that will be sold at third-party stores and teaming up with Dorcy to make DieHard brand alkaline batteries. Coupled with the other major partnerships and deals struck earlier this year, had Lampert thought as creatively a few years ago, Sears might be a much more successful business today instead of one clinging by its fingertips to survive.
As great as these deals are, it may simply be a case of too little, too late.
More brand extensions
Look at the deals Lampert made. In the case of Cleva, it will manufacture Kenmore and Kenmore Elite vacuums for distribution at retailers around the world, covering products from upright vacuums, stick vacuums, hand vacuums, and robotic vacuums to carpet cleaners, bare-floor cleaners, sweepers, and accessories.
With LED flashlight maker Dorcy, the DieHard deal will extend the car battery brand to other types of batteries as well as DieHard-branded flashlights. It's almost a no-brainer and is very similar to Lampert's decision to brand Sears' auto service centers under the DieHard name. The Dorcy partnership will see DieHard batteries distributed in the U.S. and around the world through third-party retailers.
Lampert seems to have finally realized what it takes to save the company that he's admirably sunk so much of his own money into, but it also comes with the understanding that Sears and Kmart are not the vehicles to do it.
Is Sears a licensing play?
The light bulb seemed to turn on earlier this year when Lampert first agreed to allow other companies to start selling Sears' well-known brands. Customers just aren't visiting Sears and Kmart stores in large enough numbers to generate the sales necessary to survive, so he has begun licensing his brands to third parties and allowing those companies to sell them at other retailers.
At the beginning of 2017, Lampert partnered with grill maker Permasteel to make Kenmore grills, small kitchen appliances, cookware, and other "brand-relevant adjacent products" that will then be sold through other retailers.
Then this summer, he made a deal with Amazon to start selling Kenmore home appliances paired with Sears' home services offering on the e-commerce giant's website. It marked the first time Sears would sell products directly through Amazon.
And before all of these, Lampert showed a streak of brilliance when he sold off the Craftsman tool brand to Stanley Black & Decker for $900 million, but also retained the right to sell Craftsman tools in its stores and source them from other suppliers.
Of course, it was a tragedy that Sears had sunk to such depths that Lampert was forced to sell off Craftsman in the first place, but it was a deal that made the best out of a bad situation. Even though it does mean Sears may end up competing against itself.
Late is not better than never
On the one hand, Sears investors have a right to be thoroughly angry with Lampert for overseeing the company while so much value was destroyed over the years, but then these blinding flashes of brilliance shine through, and it's enough to make you think about what could have been.
But investors have to deal with what is, and that's not a pretty picture. Reports keep surfacing of suppliers bailing on the retailer, which could make for a very bleak Christmas season. Without enough product to sell, the domino effect could chase customers away, leading to greater losses and more vendor nervousness.
Had only the Eddie Lampert of 2017 been around 10 years ago, even five, the demise of Sears might not feel so palpable. And there would be no need to look back wistfully on what could have been.