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Comment by dehrmann | Hacker News Reader

They weren't wrong. Its core business in what is still a viable-enough sector collapsed. Or if it were truly well-managed, running an ISP and a retailer should have been enough insight to be Amazon.

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It wasn't possible for them to be well managed at the time it mattered. Sears was loaded with debt by private equity ghouls; same story for almost all defunct brick and mortar businesses; Amazon was a factor, but private equity is what actually destroyed them.

And, knowing Jeff Bezos' private equity origins, one could be forgiven for entertaining the thought that none of this was an accident. Just don't be an idiot and, you know, give voice to that thought or anything.

Are you suggesting that Jeff Bezos somehow convinced all his PE buddies to tank Sears (and their own loans to it) in order for him to build Amazon with less competition? Because, well, no offense, but that seems like a remarkably naive understanding of capital markets and individual motivations. Especially when it's well documented how Eddie Lampert's libertarian beliefs caused him to run it into the ground.

> And, knowing Jeff Bezos' private equity origins

He doesn't have private equity origins as far as I know. He came from DE Shaw, a very well respected and long running hedge fund.

Thank you for bringing this up. Sears really didn't have a choice, they were a victim of the most pernicious LBO, Gordon Gecko-style strip mining nonsense on the PE spectrum. All private equity is not the same but after seeing two PE deals from the inside (one a leveraged buy out) and another VC one with the "grow at insane place" playbook I think I prefer the naked and aligned greed of the VC model; PE destroyed both of the other companies while the VC one was already doomed.

I worked at Sears at the time when Amazon first started becoming a household name. I for the life of me couldn’t understand why they didn’t make a copycat site called the Sears Catalog Online. But then I think about it and management wanted salesmanship because selling maintenance agreements was their cash cow. Low margin sales won in the long term hence we have Walmart and Amazon as the biggest retailers.

Likely standard management failure. Sears got burned badly when it put its catalog online on Prodigy in the 80's, so obviously online sales were doomed to failure.

Timing is a difficult variable.

They weren't wrong.

Evidence suggests that maybe they were. "Focusing" obviously didn't work.

But at the end of the day, it was private equity and the hubris of a CEO who wasn't nearly as clever as he'd like to have thought he was.

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