Most market watchers have long expected that Sears (NASDAQ:SHLDQ) would wind up a casualty of the e-commerce revolution. But as MarketFoolery host Chris Hill and senior analysts Jason Moser and Matt Argersinger remind us in this segment, that was not always inevitable. The real cause for the retailer's decline, they say, lays in the strategies and decisions of CEO Eddie Lampert, who treated it more as a tool for financial legerdemain, and less as a business that he could or should try to improve.

A full transcript follows the video.

This video was recorded on Oct. 10, 2018.

Chris Hill: In news that really can't be a surprise to anyone who has a basic understanding of how math works, Sears has hired advisors to help the company prepare for bankruptcy. Shares of Sears down 35% today.

Matt Argersinger: Yeah, once you DIP, there's no going back. When I say "DIP," I mean debtor in possession, which is the loan they're seeking, which is a loan that provides short-term financing. It's the most senior of debts that you get when you're in bankruptcy, just to keep the business and the lights on until everything can be sorted out. That's what's happened to Sears.

Chris, as you said, it's really no surprise that we're here. What's most surprising to me is actually how we got here. Step back 20 years ago, you could have said, "The world is changing a little bit. I can see this e-commerce thing going. I can see Walmart and Target having all this success. Sears feels a little behind. The stores are older, the catalog business isn't as strong as it used to be. Eventually, maybe, this is a retailer that's not going to be around." But what happened was, it had this weird end to it, which is, Eddie Lampert comes in, and it becomes a story of not just a retailer that's going bad, but a financial engineering story. A value investor with a great track record at the time comes in, he buys Kmart, then mergers Kmart with Sears. It becomes a real estate play, it becomes an asset play. It becomes, "I can raise money, I can pay down debt, I can buy back stock. I can create this investment vehicle that'll be really successful."

But it was always built on a crumbling foundation, which is the Sears business. All of that other stuff didn't put customers back in the stores. Stores declined over time. There was no reinvestment in the core business. I think that was ultimately what happened, and it's why we're here today, with Sears essentially on the verge of bankruptcy.

Hill: The Wall Street Journal had a line today. For people who are not looking at the business news every day, for people who are not focused on investing every day, it's probably easy to just say, "Well, this is the narrative that has played out over the last 20 years, which is the rise of e-commerce and bricks and mortar going down." The line in the Journal is, "The company was not helped by Mr. Lampert's unconventional approach to retailing," pointing out that, among other things, he really resisted investing in upgrading the stores and that sort of experience.

One other thing I'll throw in there with the financial engineering is the brands that Sears owned, that was part of Lampert's strategy, as well. "Well, if we need a little bit of money, we can sell those." They sold off the tool brand that they had.

Argersinger: Craftsman, Lands' End was spun off.

Hill: Yeah. It's kind of sad to see, but, again -- I was saying this right before we started taping -- I'm not sure what I'm more surprised by, the fact that we've been doing this show for nearly eight years, or that we've been talking about Sears going bankrupt for nearly eight years, and they're still in business!

Jason Moser: That headline is killing me. It talks about possible bankruptcy. I mean, come on, man! This thing is imminent! Just say that they're getting everything in order to go ahead and file for bankruptcy. It's imminent! It's not possible anymore!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.