I'm about to go home to take Parker to the vet (he's getting two stitches out after she removed a fatty cyst from his eyelid), and then to resume panicking packing. I might have time to read these three articles:
Moving tomorrow. I just want this to be over...
As predicted, Eddie Lampert has succeeded in driving Sears into the ground:
In announcing the news, Sears said Edward Lampert stepped down as CEO effective immediately and remains chairman.
Sears and Kmart stores and online platforms will remain open, though the company also said it would close 142 unprofitable stores near yearend, with liquidation sales at those locations "expected to begin shortly."
The company said it has commitments for $300 million of debtor-in-possession financing from its senior secured asset-based revolving lenders and is negotiating a $300 million subordinated DIP financing with ESL Investments, where Lampert is chairman and CEO. The hedge fund held about $2.5 billion in Sears debt as of September, the result of multiple attempts to keep the chain afloat.
Negotiations over the fate of the fallen company continued over the past week, as it faced a critical $134 million of debt that is maturing today.
So, after killing the 132-year-old company, Lampert stands to make millions from its demise. And 68,000 people will soon be out of work.
Update: Crain's has an obituary.
I think I've finished 95% of my packing. I've only got, you know, several hundred small items that I'll wind up throwing in boxes marked "misc" tomorrow night.
On Thursday, Singapore Airlines reinstated its nonstop flight from Newark, N.J., to Singapore—an 18-hour, 45-minute marathon that covers 16,734 km:
What accounts for this sudden ultra-long-haul boom? Partly, it is technological advances. The Singapore-Newark flights will use new Airbus A350-900 ULR (ultra-long-range) planes, which are made of lightweight carbon-fibre materials, have extra fuel capacity, and conserve fuel by using only two engines rather than the typical four on long-haul jumbo jets. Singapore will also make these marathon flights more bearable with a few comfort upgrades. There will be no economy seats—just premium economy and business class—and only a total 161 seats compared to 253 on the carrier’s current A350-900s. The airline also claims an upgraded food menu and a range of entertainment options will help whittle away the many hours on board.
Here's FlightAware's map of that first flight, and GC Map's.
Remarkably, you can get a business class ticket on the flight for only $5,300, according to Hipmunk. (That's remarkable because a business class ticket to London for the same dates would be $8300 on American or $7650 on British.)
Who wants to go with me?
Citing a $10m budget shortfall, Lyric Opera of Chicago has cut their orchestra's year by two weeks and cut six performances. In response, the Chicago Federation of Musicians has gone on strike, forcing the cancellation of La Boheme and possibly other productions:
The orchestra and management have stalled on contract negotiations, and according to bassoon player Lewis Kirk, musicians have been working without a contract since June.
Kirk said management had issued “severe demands.” He pointed to management’s proposal to eliminate five positions in the orchestra as a major point of contention. He said overall quality will be threatened.
[Anthony Freud, general director at the Lyric Opera of Chicago] maintained the proposed cuts come as a result of supply and demand. There were 61 performances during the 2017 to 2018 season.Freud said only 55 were scheduled for the 2018 to 2019 season to ensure the company could sell enough tickets. According to Freud, fewer performances account for management’s plan to reduce annual working weeks for members of the orchestra from 24 to 22.
Said one of my friends who is familiar with the negotiations:
If Lyric faces financial challenges, it is not because of the Orchestra. Lyric grew its budget in recent years, from $60.4 million in 2012 to $84.5 million in 2017. But the Orchestra saw none of that $24 million increase. To the contrary, the Orchestra’s share of the budget has decreased steadily, from 14.6% in 2012 to 11.9% in 2017. If Lyric wants to make cuts, it is looking in a misguided place. Since 2011, orchestra members’ weekly salary has increased an average of less than 1% per year; adjusted for inflation, wages have actually decreased by 5.1% since 2011. The musicians’ last bargaining proposal to management proposed tying wage increases directly to the rate of inflation. They are not even trying to make up for lost ground. It is infuriating and heartbreaking.
I haven't seen La Boheme yet, and I may not this year. Heartbreaking indeed.
If the Kanye West–Donald Trump crazyfest didn't do it for you, there are plenty of other things to take a look at this lunchtime:
That's all for now. Enough crazy for one Friday.
I just read through the complete, official transcript of Kanye West's meeting with President Trump yesterday, and...wow. That man has some serious untreated mental illness and should seek help.
I know, that sentence was ambiguous, because "that man" could refer to either Trump or West, but in this case I thought West came across as the less coherent. Sample:
MR. WEST: We have a good — and the thing is, let’s stop worrying about the future. All we really have is today. We just have today. Over and over and over again, the eternal return. The hero’s journey. And Trump is on his hero’s journey right now. And he might not have expected to have a crazy motherfucker like Kanye West run up and support, but best believe we are going to make America great.
There’s a lot of things affecting our mental health that makes us do crazy things that puts us back into that trap door called the 13th Amendment.
I did say “abolish” with the hat on. Because why would you keep something around that’s a trap door? If you’re building a floor — the Constitution is the base of our industry, right? Of our country, of our company. Would you build a trap door that if you mess up and you — accidentally something happens, you fall and you end up next to the Unabomber? You end up — you got to remove all that trap door out of the relationship.
The four gentlemen that wrote the 13th Amendment — and I think the way the universe works, it’s perfect. We don’t have 13 floors, do we? You know, so the four — the four gentlemen that wrote the 13th Amendment didn’t look like the people they were amending. Also at that point, it was illegal for blacks to read — or African Americans to read. And so that meant if you actually read the Amendment, you would get locked up and turned into a slave.
What is all that? Word salad? Dog-whistle quodlibet?
Here's the pool video from NBC; judge for yourself:
Oh, Sears. You've come to represent much that is wrong with American corporate culture, especially a CEO who embodies the Dunning-Krueger Effect with every syllable he utters.
Crain's Joe Cahill argues that Eddie Lampert, while Sears' proximate cause of death, didn't act alone in its murder:
There's no denying the hedge fund mogul who thought he knew more about retailing than the retailers made critical errors that turned Sears' struggles into an inexorable decline. But Sears started down the wrong path long before Lampert appeared. And its sad fate isn't so much a story of operational missteps as one of missed opportunity. In short, Sears chose to imitate Walmart when it should have tried to pre-empt Amazon.
Like so many established companies threatened by newcomers with innovative business models, Hoffman Estates-based Sears tried to beat the interlopers at their own game, rather than looking ahead to the next big thing. The company that recognized the potential of railroads to support a nationwide retail operation and foresaw that postwar suburban sprawl and shopping malls would redefine retailing for a new generation failed to appreciate the implications of internet technology for the industry it dominated for more than a century.
As for Lampert, he showed no better vision than his predecessors. When he took control of Sears by merging it with Kmart, the combined company still had an opportunity to carve out a strong presence in e-commerce. Amazon had already emerged as the leading internet retailer, but with $8.49 billion in 2005 revenue, it was one-sixth the size of Sears, and barely profitable.
Meanwhile, two other Crain's stories outline the thousands of other victims of this crime: the company's pensioners and all of the malls about to lose their anchor tenants.
Press reports reckon the company has less than 48 hours to live.
Anyone who has traveled from the US to Canada or Europe notices quickly that their transit systems simply work better. Londoners may moan about the Tube, but one can get from any part of Greater London to any other at almost any time of day using trains or buses.
Writing for Citylab, Jonathan English explains why and how the rest of the world got it right and we got it so very wrong:
[T]o briefly summarize: Transit everywhere suffered serious declines in the postwar years, the cost of cars dropped and new expressways linked cities and fast-growing suburbs. That article pointed to a key problem: The limited transit service available in most American cities means that demand will never materialize—not without some fundamental changes.
Many, though not all, major cities in the U.S. have a number of rail lines radiating out of their centers. Most of them are only used by freight or a few commuter train trips a day. It’s a huge, untapped resource. There’s no reason why those railway lines can’t be turned into what are effectively subway lines—high-capacity routes that allow people to get across the city quickly—without the immense cost of tunneling. In Europe, what we usually call “commuter rail” operates frequently, all day, and cost the same fare as other local transit. That’s the difference between regional rail and commuter rail. A transit system with service that is only useful to 9-to-5 commuters to downtown will never be a useful one for most people.
Fares need to be low enough that people can afford to take transit. New York City will soon join other cities like Tucson and Ann Arbor in having discounted fares for low-income people. That is important to make transit accessible to everyone. But fair fares isn’t just about keeping fares low. It’s also about eliminating arbitrary inequities. People shouldn’t have to pay a transfer penalty or a double fare just because they switch from bus to rail, transfer between agencies, or travel across the city limits. A transfer is an inconvenience—you shouldn’t have to pay extra for it.
Fares should be set for the convenience of riders, not government agencies. A trip of a similar distance should have a similar fare, regardless of whether it’s on a bus or train, or if you have to cross city limits. Commuter rail shouldn’t be a “premium service” that only suburban professionals can afford.This is the kind of unfairness that infuriates people and drives them away from transit.
Chicago, by the way, has contemplated a regional farecard system for decades. Maybe someday...
Crains is reporting this morning that Sears has hired bankruptcy advisors and could file in the next couple of days:
[S]taffers of the advisory firm, New York-based M-III Partners, have been observed at the troubled retailer's Hoffman Estates headquarters in recent days. Sears, meanwhile, continues to evaluate other options that could still avert a trip to Bankruptcy Court.
Separately, Sears added restructuring expert Alan Carr to its board of directors as the company faces critical debt repayments and looks to overhaul its borrowings, the company said earlier today.
Carr is CEO of restructuring advisory firm Drivetrain and has over 20 years of experience with financially distressed companies as both an investor and an adviser, according his firm’s website. Before his current role, he was a distressed-debt and private equity investor at Strategic Value Partners.
Thank you, Eddie. You've done a man's job killing one of Chicago's oldest brands.