Most collapses are about incompetence. Wrong product. Wrong market. Wrong timing.
Sears is different.
Sears is about a man who controlled the company, controlled the board, and used that control to make sure that when the collapse came — he would be on the right side of it.
His name was Eddie Lampert. He was a hedge fund manager. He bought Sears. And what happened next is one of the most calculated exits I have covered.
— The Vulture
THIS WEEK'S AUTOPSY
Sears was once the largest retailer in America. At its peak it had over 3,500 stores. It had a catalogue business that predated Amazon by a hundred years. It sold everything — houses, cars, insurance, refrigerators. It was the original everything store.
Then in 2005, hedge fund manager Eddie Lampert engineered a merger between Sears and Kmart. He became the largest shareholder, then the chairman, then effectively the CEO. He ran the company from a distance — famously conducting meetings via video conference from his compound in Florida. And while he ran it, the company declined. Store by store. Year by year. Revenue fell from $55 billion in 2006 to under $17 billion a decade later.
But here is what makes Sears different from a standard retail collapse.
In 2015, Lampert carved out Sears' real estate. He moved it into a separate REIT called Seritage Growth Properties. Sears sold 235 of its best properties to Seritage for $2.7 billion, then leased them back. Seritage was controlled by Lampert. Sears was controlled by Lampert. He sold the buildings to himself.
When Sears filed for Chapter 11 in October 2018, the most valuable assets — the real estate — were already out of reach. Ring-fenced in Seritage. Beyond the creditors.
Lampert then submitted a bid to buy Sears out of bankruptcy through a vehicle called ESL Investments. Also his.
The creditors sued. They argued the Seritage transaction was a fraudulent transfer — that Lampert had stripped Sears' most valuable assets at below-market prices before the filing. The lawsuit was eventually settled for $175 million. The buildings stayed in Seritage. Lampert kept control.
That is the Sears autopsy. Not a story about Amazon killing a dinosaur. A story about who owned what when the doors finally closed.
Full episode is on YouTube now. Link below.
THE WATCHLIST
Three companies showing distress signals right now. Not financial advice. Do your own research.
Big Lots — Discount retailer that filed Chapter 11 in 2024. Watching store closure execution, lease renegotiation outcomes, and whether the buyer can stabilize what was already a structurally weak business.
Tupperware — Filed Chapter 11 in September 2024. Brand recognition without a viable modern distribution model. Watching whether any buyer can rebuild the direct sales channel or pivot to retail at scale.
Party City — Filed Chapter 11 in 2023, liquidated in 2024. Now watching the party supply category broadly — who fills the retail vacuum and whether any distressed buyer picks up the IP.
THE VULTURE'S PICK
Every issue I share one tool or resource I actually use in my research. Coming in the next issue.
— The Vulture
NEW ON YOUTUBE
This week's episode is live now.
Sears Went Bankrupt. Its Own CEO Walked Away With the Real Estate.
How Eddie Lampert ran Sears for a decade, carved out $2.7 billion in real estate through a REIT he controlled, and bought the company out of bankruptcy through a fund he also controlled.
Watch it here: https://www.youtube.com/@thewallstreetvulture
BEFORE YOU GO
Next Tuesday I'm releasing the next autopsy. A retailer that was doing $11.8 billion in revenue. That had just bought back $12 billion of its own stock. And that had an activist investor who took a large position, pumped the stock, and sold before the collapse. The stock went to zero eighteen months later. That is the Bed Bath and Beyond autopsy. Tuesday. 7:00am Eastern.
— The Vulture