John thinks we were writing about this just the other day …
… you know about large companies buying up small companies and then wondering what to do – and getting all confused …. well I know it wasn’t exactly that – but close enough. Here is what we said.
Anyway, on a similar and related topic – this is GothamGal rapping on the state of retail as we enter 2017 and noting both Macys and Sears cutting their brick and mortar stores back significantly – and ‘The Limited’ closing all stores completely.
If you look at enterprise companies such as Verizon or Facebook we will see more M&A’s over the next decade as those companies realize that they need to bring in agile companies who can help their organizations become forward thinking, keep their marketshare and innovate. The department stores have not figured that out. Nordstrum’s is the one store attempting to do that by making investments and purchases such as Trunk Club but once they are under their umbrella it appears as if they do not know what do to with them in order to create excitement, customer loyalty and how to use their platform to rethink old school ways.
Bottom line ‘GothamGal‘ says it is too easy to blame Amazon for the demise of retail, rather we should consider that maybe the blame is the lack of agility of these large stores. John agrees.
Graham notes …
… that the contribution made to that lack of agility is likely by the imposition of rigid and unfounded ideologies, does this sound at all familiar? Take Sears/K-Mart (please! — as the old music hall joke would have it). Until 2013 they were run by a fanatical Randite, Eddie Lampert, who seemed to fancy himself a new John Galt. Lampert is now gone. But that former hedge fund manager has lots of company in the ranks of would-be corporate miracle-workers.
“…The epic incompetence of guys like Lampert may be dispelling the myth that financiers are the smartest guys in the room. Research suggests that not only do hedge fund managers typically understand squat about running a company, they’re often not much good at beating the stock market, either. A recent Bloomberg article points out that in 2013, hedge funds returned 7.1 percent. That doesn’t sound so bad, until you consider that if you had just stuck your money in the Standard & Poor’s 500 Index you would have seen returns of 29.1 percent. Big difference!