Sears Chairman Eddie Lampert says his company has been unfairly targeted by critics, while companies like Amazon, Tesla, and Uber are given special privileges.
“Because of Sears and Kmart’s longstanding history and cultural impact, we are targeted for criticism when our results are poor,” Lampert wrote in a letter to shareholders on Thursday. “But it is unfair to evaluate our approach through the rearview mirror without acknowledging the changing circumstances in our industry as well as our bold attempts to change the way we do business to meet this changing reality.”
Sears said Thursday that its same-store sales fell 7.1% in the fourth quarter and revenue dropped 9.8% to $7.3 billion. The company lost $580 million, or $5.44 per share, in the quarter compared with a loss of $159 million, or $1.50 a share, for the same period last year.
Lampert blamed the performance on warmer-than-expected winter weather and a difficult overall environment in retail.
He also claimed that companies like Uber, Amazon, and Tesla are celebrated even when they are losing money, making it difficult for Sears to compete.
Uber “has reportedly raised over $10 billion in capital since it commenced operations at progressively higher valuations, in some cases exceeding $50 billion in value,” Lampert wrote. “At the same time, it was recently reported that Uber is losing over $1 billion a year in China alone. In an environment where new companies like Uber can raise almost unlimited capital, what are the implications for older companies that are held to a very different standard when it comes to profitability and regulation?”
Lampert also claimed that Amazon and Tesla get special privileges that have contributed to their growth, while traditional companies like Sears are left to fend for themselves.
“Companies like Amazon were able to grow rapidly without having to collect sales tax, while traditional retail companies had the dual disadvantages of having to report profits and to collect sales tax from their customers,” Lampert wrote. “The consequence? We are now seeing more and more retail stores shut down.”
Lampert also drilled into Tesla for benefitting from government subsidies.
“Some innovative companies like Tesla are heavily subsidized by government policy (either directly or through purchases made by their customers), while existing car companies are forced to comply with mandates to produce cars that people may not want at enormous cost.
These companies rely heavily on continued financing (Tesla raised over $1 billion in equity and over $2.5 billion in debt over the past four years) and favourable capital market conditions and valuations, while companies viewed through a more traditional lens, like Sears Holdings, are met with scepticism even though we have an enormous asset base and a proven history of monetizing these assets and raising additional capital to fund our obligations and transformation.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.