can retailers survive in this age of amazon? · for retailers that cut their brick-and-mortar...

1—STRAIGHT TALK Summer 2016—

Volume 19, Issue 1 Summer, 2016

This issue of STRAIGHT TALK:Can Retailers Survive Amazon? p. 1

Retailers Worry about Wal-Mart? p. 4

Can Sears Retain Clear Identity? p. 5

Finding Profitability Not Easy p. 6

Happy Birthday, Ernie! p. 9

Not Too Late to Renew p. 10

Art Levin Remembered p. 11

Can Sears Stay Alive? p. 12

Can Retailers Survive in this Age of Amazon?“Are traditional brick-and-mortar retailers dying a slow death?” is the biggest question that inves-tors have been asking. Recent earnings were terrible for de-partment stores such as Macy’s, J.C. Penney, Sears, Nordstrom and Kohl’s. These stores cut earnings and profit projections, citing slowing foot traffic and structural issues.

As older merchants try to fend off the endless assault of e-commerce, the hit list of dead and dying retailers only seems to grow longer. Sports Authority recently declared bankruptcy. Hancock Fabrics, a crafty retail-er founded in 1957 will be filing for bankruptcy this year. Staples just announced it’s closing an-other 50 stores despite shutting 242 North American locations in the past two fiscal years.

Other casualties of the “bricks vs. clicks” phenomenon include Bor-ders, Circuit City and Radio Shack. All of these retailers were forced to declare bankruptcy, largely because of the precipitous rise in consumers’ online shopping habits.

Tamara Walsh, a Motley Fool re-tail analyst, said that part of the problem for the big-box retailers

is pricing. E-commerce companies such as Amazon have lower over-

head costs because they don’t have physical storefronts like their retail counterparts. This, together with Amazon’s unrelenting commitment to offering the lowest possible prices on everything under the sun, make it a fierce competitor for the cost-heavy brick-and-mortar retailers.

Another signif icant factor, ac-cording to Ms. Walsh, is the

“showrooming” epidemic. Con-sumers use the big-box stores to

comparison shop only to make purchases elsewhere online.

Success StoriesWhile the retail landscape of many is dismal, there are a few success stories. Home Depot, the largest home improvement retailer, which operates 2,275 stores, had comp-store sales for the most recent quarter up 6.5 percent, with comps for its U.S. stores up 7.4 percent. This At-lanta-based retail giant expects sales to grow 6.3 percent in fiscal 2016, and expects its comps to grow 4.9 percent.

According to Jeff Reeves with MarketWatch, the reasons why Home Depot has succeeded are quite interesting. In part, it’s be-cause lumber and paving bricks

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are hard to commoditize via online shopping: the mere weight alone makes shipping difficult, and the need to look at grains in wood and contrast paint colors in real life help. But that hasn’t stopped the company from pushing what it can to the web. In fiscal 2015, $4.7 bil-lion of its $88.5 billion in revenue came from online sales.

And on another positive retail note, the Mooresville, North Carolina, based Lowe’s reported net earnings of $884 million for the quarter ended April 29, a 31.4 percent increase over the same quarter last year. Sales for the quarter increased 7.8 percent to $15.2 billion. Comp-store sales in-creased 7.3 percent overall, and increased 7.5 percent for its do-mestic business. Lowe’s operates 1,860 home improvement and hardware stores in the United States, Canada and Mexico.

Amazon, the Retail SlayerJeff Bezos, at age 31, opened Am-azon.com on July 16, 1995. The initial success of the company was meteoric. With no press pro-motion, Amazon.com sold books across the United States and in 45 foreign countries within 30 days. In two months, sales reached $20,000 a week, grow-ing faster than Bezos and his start-up team had ever envisioned.

Amazon.com went public in 1997, leading many market analysts to question whether the company could hold its own when traditional retailers launched their own e-commerce sites. Two years later, the start-up not only kept up, but also outpaced competitors, becoming an e-commerce leader.

Bezos continued to diversify Ama-zon’s offerings with the sale of

CDs and videos in 1998, and later clothes, electronics, toys and more through major retail partnerships. Beginning shortly, Amazon will start selling its own private-label groceries, diapers and more.

“Happy Belly,” “Wickedly Prime,” and “Mama Bear,” are among the names of new brands Amazon will sell, and the company will stock items such as nuts, spices, baby food and coffee. Amazon has been developing private-label products for many years. The

company reached out to branding consultants and manufacturers like TreeHouse Foods, Inc. to get ready for the launch.

While many dot.coms of the early nineties went bust, Amazon flour-ished with yearly sales that jumped from $510,000 in 1995 to over $107 billion in 2015, up 20.2 percent from $88.99 billion in 2014.

Amazon.com was the best-per-forming stock last year in the S&P 500. Unfortunately, most of the rest of the retail industry is in a chaos mode.

One financial analyst, Ari Levy, said that, “It’s no secret that Ama-zon has changed the retailing game by selling just about everything imaginable, often at the lowest price, and shipping products with such speed and efficiency that many consumers have simply stopped going to stores.

“Amazon’s willingness to oper-ate with almost no profit margin makes it virtually impossible for anyone to compete and make money unless they’re selling something entirely different,” Levy added.

CEO Bezos told shareholders at Amazon’s 2016 annual meeting on May 17 that he is giving pri-ority to long-term growth over short-term profitability. Amazon opened its first-ever brick-and-mortar store in Seattle last year. “We’re definitely going to open additional stores,” Bezos told shareholders. He did not further elaborate on his plan, or specify what kind of stores he was re-ferring to, saying it’s still an experiment at this stage.

In a 2012 interview with Charlie Rose, Bezos said he’d love to open a brick-and-mortar store, but only if Amazon can have a “truly differ-entiated idea.”

“One of the things that we don’t do very well at Amazon is do a me-too product offering. So when I look at physical retail stores, we don’t want to do things because we can do them. We want to do something

Jeff Bezos, Amazon CEO

Amazon continued from page 1

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because it’s going to—we don’t want to be redundant,” Bezos told Rose.

Some of those different ideas are already starting to show up at Amazon’s retail store in Seattle. The book covers face outwards, instead of being displayed spine-out, and online reviews are shown next to each product.

Amazon thinks about what the cus-tomer wants. Traditional retail still thinks about how to sell inventory in their warehouse.

Retail Death Spiral?Many blame Amazon.com for the end of retail as we know it today. And they are partly correct. Con-sider that real estate research firm Green Street Advisors just esti-mated that roughly 800 department stores would probably have to close for retailers to reach the same level of profitability from 10 years ago.

According to this report, Sears Holdings would have to close almost half of its stores to reach the same level of profitability from 10 years ago. Sears seems to be fulfilling this prophecy with the company closing 78 Sears and Kmart loca-tions over the next several months. Sears also said last February that it will speed up its future store-closure plans after another round of terrible sales numbers.

According to Jeff Reeves with Mar-ketWatch, e-commerce is surely to blame for some of those lost reve-nues. However, a new analysis from Bain & Company, one of the world’s leading management consulting firms, indicates that falling sales become a self-fulfilling prophecy for retailers that cut their brick-and-mortar footprint. An analysis of 15 years of retail data shows that merchants that close stores

in response to sluggish sales may momentarily stop the bleeding, but also fail to ever return to growth in the future.

Many of these troubled retailers are not just a victim of e-commerce competition, but also poor man-agement. The success of Amazon is thinning the herd, but strong brands will have successful stores for the foreseeable future. For a look at what the future of mall-based retail will look like, visit your local Apple store.

Other ReasonsAs recently reported in The Wall Street Journal, there may be other reasons, besides the success of Amazon, for retail troubles. Accord-ing to Justin Lahart, Americans are directing an increasing share of their spending on services. Over the past decade, for example, total consumer spending on clothing and footwear has risen just 1 percent annually, unadjusted for inflation. Spending on cable and satellite television and radio services has increased at a 5.1 percent rate.

That partly reflects a change in attitudes that came about in the wake of the financial crisis. Not only are people being more careful about spending, they are also being careful about where they spend. In many cases they are opting for ex-periences like going to restaurants and taking vacations over accumu-lating more stuff.

Lahart adds that unless those at-titudes change, and there’s no sign that it’s about to, retailers’ woes will continue.

Another Point of ViewSean Williams, another Motley Fool retail analyst who has worked in the retail industry for a de-cade, believes all is not “doom and

gloom” for the big-box stores. While companies such as Amazon have the ability to make the shopping experience more convenient and potentially to undercut mall-based retailers’ prices, there are a few things an online website can’t do.

At the top of this list is the ability to allow a customer to touch and feel a product before purchasing it. Williams admits that there is nothing to stop what’s known as the showrooming effect. This is a problem that plagued Best Buy, yet Best Buy is still holding its own.

In reality, there are ways brick-and-mortar stores can add value, both tangibly and intangibly, to consum-ers’ transactions that’ll keep them loyal to mall-based stores and not a faceless online website.

For example, having a knowledge-able and professional staff offers consumers a face to a business as opposed to a faceless website. It allows the consumer to forge an emotional attachment to the brand or products represented by the brand, which is very difficult to do with the click of a mouse.

An inviting in-store environment is also critical. More in-store digital displays or interactive displays are being used by mall-based retailers to relate to tech-savvy millennials or keep children entertained while their parents shop.

And finally, loyalty rewards are another strong sales tool. Although these awards work online as well, the entire goal of the mall-based retailer is to keep you shopping within its brand. Whether through price matching or some nominal discount for staying loyal to a brand, these tangible discounts


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have the power to drive business away from Amazon.

The Bottom LineNo one will argue that e-commerce certainly presents a threat to the brick-and-mortar stores with low prices and the convenience of shop-ping from home. The past year has been very rough for retail. But the big boxes are responding. Wal-Mart last year made a record investment in its e-commerce channel and

Target has also made online sales a priority.

However, there’s little disagree-ment that the potential for further store closings is high. One thing is for sure—retailers will need to continue to adapt their playbooks, because Amazon and the changes it has created are here to stay.

Other retailers will surely exist in this Age of Amazon. But for the leg-acy merchants that are behind the

times and suffering slumping sales, they already may be beyond saving.

For those interested in exploring this topic further, a book published last year by three Harvard Busi-ness school marketing professors titled “Retail Reaches a Tipping Point—Which Stores Will Survive,” outlines three strategies for retail-ers to consider as responses to the online threat. These strategies include: (1) Enhancing the Value of the Box; (2) Shrink and Transform the Format; and (3) Wind Down.

SHOULD RETAILERS ALSO WORRY ABOUT WAL-MART?


The world’s biggest retailer recently posted almost a one percent increase in first quarter revenues and also predicted that its sales in existing stores would rise in the next quarter. This is in stark contrast to weak results from many other U.S. retailers.

What is Wal-Mart doing that its competition is not? The company has been spending heavily to draw customers to its stores by better stocking shelves, increasing pay for its employ-ees, and investing in e-commerce and sprucing up its stores.

As recent ly repor ted by Justin Lahart in The Wall Street Journal, “The payoff from those investments are better experiences for customers, a more robust online presence and—as the f irst-quar ter results show evidence of—better sales. For anybody looking for a way to handle the chal-lenges of e-commerce share gains and shifting consumer attitudes, Wal-Mart may have put together a con-vincing playbook.”

However, as Lahart added, what Wal-Mart is doing, “ … isn’t necessarily a playbook that other retailers can follow. Wal-Mart doesn’t carry as heavy a debt load as do many other retailers, giving it more leeway to invest in sales growth. It is also majority-owned by founder

Sam Walton’s family members, who presumably are in the stock for the long haul.”

Sarah Nassauer in The Wall Street Journal on May 19 said that Wal-Mart also benefits from the strength of lower-income customers and broad shifts in retail away from some products as clothing. Wal-Mart’s apparel

business is doing well because it has focused on affordable basics, not fashion-forward

clothes according to Brett Biggs, the company’s chief financial officer.

“There is a demand for that,” he added.

In addition, Wal-Mart gets more than half its U.S. revenue from food and groceries, an area that has been slow to shift online. As a result of its grocery sales, Wal-Mart is less dependent on apparel than many of

its competitors.

Customers are just not shopping as much for “stuff” anymore. As

Lahart reported, many other retailers have been losing sales as customers “have

migrated online and shifted spending toward things like going out to eat rather than shopping.”

Aside from Amazon.com and Wal-Mart, the downward spiral continues and will be difficult for many retailers to escape. continued on page 5


Best Customer ExperienceThe 2016 Temkin Experience Ratings were just released. This is an annual ranking of companies based on a survey of 10,000 U.S. consumers. True Value took the top spot in the retail category with a rating of 78 percent, placing it third overall out of 294 companies across 20 industries.

These Ratings were reported by Dan Berthiaume in the May 24 issue of RetailingToday.

Out of the 46 retailers included in the ratings, True Value was the only one to improve its score from last year. Amazon.com and O’Reilly Auto Parts tied for the second spot, each earning a rating of 76 percent.

The top 11 retailers in this annual ranking of compa-nies are as follows: True Value (78%), Amazon.com (76%), O’Reilly Auto Parts (76%), QVC (75%), Dollar Tree (75%), Sam’s Club (74%), Dollar General (74%), Lowe’s (73%), PetSmart (72%), Michael’s (72%) and BJ’s Wholesale Club (72%).

The bottom 14 retailers are: RadioShack (55%), Gap (58%), Foot Locker (59%), Old Navy (60%), Kmart (62%), Macy’s (62%), OfficeMax (63%), Marshalls (63%), GameStop (63%), Office Depot (64%), Wal-Mart (64%), Best Buy (64%), Toys ‘R’ Us (64%) and Sears (64%).

Least Engaging RetailersAlso reported by Marianne Wilson in RetailingToday, five retail chains ranked among the top 10 brands doing a poor job when it comes to emotional engage-ment, a measure of how well brands meet consumer expectations, according to Brand Keys’ Customer Loyalty Engagement Index survey.

Sears ranked number six with one of the ten brands having the lowest emotional engagement strength. Robert Passikoff, president of Brand Keys said: “If you do poorly, consumer displeasure not only shows up on the list but harshly in the real-world marketplace. And shortly thereafter on profit-loss statements.”

WILL SEARS RETAIN A CLEAR IDENTITY?This is not a current headline, but one that was pub-lished in the March 28, 2003, edition of the Chicago Sun-Times. Since this issue of Straight Talk has articles about retailers surviving the onslaught of Amazon; and the current Chairman and CEO of Sears Holdings telling shareholders at its 2016 annual meeting that finding profitability is not an easy task, this 13-year old article written by San-dra Guy about a possible merger of Sears & Kmart, Sears sale of its credit card business and what tradi-tional retailers do when they get in trouble, is very interesting reading.

Article by Sandra Guy“It is a troubling comparison but an inevitable one: After Sears, Roebuck and Co. sheds its credit card business, will it find itself with a muddled retail iden-tity like Kmart and the defunct Montgomery Ward?

“Sears, like Kmart and Ward before it, is struggling to find an identity between Wal-Mart’s deep discounts and Target’s cheap chic.

“Though such compari-sons are expected, a new and surprising possibility emerged Thursday when the Detroit Free Press reported that a multi-mil-lionaire investor who owns substantial stakes in both Kmart and Sears could try to merge the two retailers or kick them out of their stores and sell the real estate.

“Investor Edward Lampert, one of America’s wealthiest men who made headlines in January when he was kid-

naped from his Greenwich, Connecticut home, owns a controlling stake in Kmart and has recently bought enough shares in Sears to become its second-largest

Alan Lacy and Edward Lampert

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Walmart continued from page 4


shareholder. Lampert was recently returned safely af-ter the kidnaping plot turned into a comedy of errors.

“Steve Lipin, a spokesman for Lampert’s ESL Invest-ment hedge fund, said Thursday he could not comment on Lampert’s investment in Sears or whether he will buy more shares.

“A Sears spokesman could not be reached for comment late Thursday.

“Michael Markowski, director of research at StockDi-agnostics.com, said Lampert may consider Sears and Kmart more valuable dead than alive.

“Another tie between Kmart and Sears is Kmart CEO Julian Day, who left the Hoffman Estates-based re-tailer shortly after he lost his bid for CEO to Alan Lacy.

“Analysts drew comparisons in operational areas, too.

“When traditional retailers get in trouble because they are losing market share, they begin by cutting expenses, and sometimes they sell assets to help compensate for their declining market share,” said Sid Doolittle, founding partner of Chicago retail consulting firm McMillan Doolittle.

“All three retailers (Kmart, Ward and Sears) have done that,” he said when asked about such a comparison.

“Unlike its troubled peers, Sears had a $1.2 billion in operating profits last year (2002), a 28 percent increase from 2001. Most of the profits were achieved from cut-ting costs and shedding operations.

“Kmart is in Chapter 11 bankruptcy reorganization and Ward filed for bankruptcy protection for its sec-ond and final time on December 28, 2000. Ward sold its credit card business to GE Capital in 1988 to help finance senior managers’ leveraged buyout of the Chicago retailer.

“Despite Sears’ hopes for a windfall from the sale of its credit card business, some financial analysts said Sears is selling at the bottom of the market.

“The credit card industry is weaker now because con-sumers have overextended themselves and, in a weak economy, fallen behind on their payments.

“Sears’ premium is expected to be 10 percent, though estimates of what its credit card business would fetch range from $2.8 billion to $7 billion.

“Sears’ portfolio is cause of great concern because its Gold Master Card accounts are too new to show the full effects of future delinquencies and bad debts. Sears launched the MasterCard three years ago, and converted 23 million of its 60 million Sears cardhold-ers to its more generous lines of credit.

“Lacy said the last time he considered selling the credit card business was a few years ago, but the potential value to shareholders wasn’t compelling, and Sears’ retail business was in no position to stand on its own.

“We are looking for someone we can work with ef-fectively for a long period, in support of our business and our customers,” Lacy said. “It has to make sense economically for (the buyer) as well.”

Identity continued from page 5

Chairman Lampert Admits

Finding Profitability Not an Easy TaskAt the Sears Annual Meeting on May 11, Chairman and CEO Ed-ward Lampert told shareholders that he wants to return his money-losing company to profitability this year, after five years of losses. Doing so will not be an easy task. He said this is his intention, not a forecast.

To remain competitive, the com-pany will continue to try new ideas to attract shoppers in its

stores and online. One such idea is a smaller appliance store that will be about 10,000 square feet, much smaller than a typical Sears store of 138,000 square feet. This is certainly unexpected news from a company that’s been aggressively closing stores.

The initial pilot store, due to open May 27 in Fort Collins, Colorado, will be Sears’ first non-specialty store opening since 2005. “Obvi-

ously we want to move the needle,” Leena Munjal, senior vice president, customer experience and integrated retail, said in an interview, refer-ring to the potential for expansion. “This is very much a quick, scalable model.”

Appliances have been a relative strength for Sears, making it a natural choice for the first small store. However, Munjal said when

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the company rolls out other small format locations, they may focus on different categories. She did not elaborate.

Sears said the new Colorado store would carry the same assortment of appliances as in a typical Sears department store, including the top 10 brands of refrigerators, dish-washers and other products. It will also feature a 122-inch interactive display, which customers can use to see how appliances would appear in various kitchen layouts.

Lampert said that the smaller format is an experiment and a chance to attract and engage more shoppers. Even though the company is closing larger stores, he told the audience of shareholders that “I think we’ll do more of those (smaller) stores …. Stores in general aren’t going away.”

This first small-scale appliance store in Colorado is an example of how Sears will focus on its best categories, such as Kenmore appliances, which have been popular with shoppers.

More PartnershipsChairman Lampert stated he would not rule out re-evaluating the corporate structure and establishing more partnerships with other retailers and services in the future. “I think there is going to be a lot more opportuni-ties for retailers to partner with each other outside of outright ac-quisitions …. I think there’s a lot of anachronistic thinking in the industry: ‘We don’t want to work with our competitors.’ ” But, Lam-pert said, that’s changing.

He mentioned Target’s recent sale of its internal pharmacies to CVS as another example of retailers’ increasing willingness to partner with best-in-class providers to deliver excellent customer service.

These partnerships can help fulfill the needs of customers and build company loyalty, Lampert said. For instance, in the Costa Mesa, Cali-fornia, Sears store, retailer Forever 21moved into extra space at this location. And Sears in Clearwater, Florida, provided extra space to

Whole Foods.

But Lampert admitted that try-ing to fix Sears has been about as easy as closing the U.S. military prison in Cuba. Lampert compared his quest to fix Sears to President Barack Obama’s struggle to close the detention camp in Guantanamo Bay. He added “Our focus right now

is to show people that we can get this company back to profitabil-ity.” To accomplish this goal, the company is closing stores “more aggressively,” he said.

Shop Your Way Not WorkingLampert has touted for the past five years the Shop Your Way platform as the answer to the company’s woes. But he told shareholders that the program isn’t getting people to spend enough money. In other words, the Loyalty Program is not working.

He said the program has an enormous number of registered members, but many of them are not as active as he would like them to be. Three-quarters of Sears’ revenue comes from registered Shop Your Way mem-bers, but many of them are not frequent buyers.

“We’ve built the platform, we’ve built the capabilities, (but) we’ve fallen short on getting them engaged. Are we really getting the bulk of their purchases? We want to serve our members deeper. If you shop with us 10 times a year and spend $300, we’d like you to shop 100 times a year and spend $3,000,” Lam-pert said.

This Shop Your Way platform, which adds a variety of social and sharing features on top of loyalty-related coupons and e-

commerce, needs more activity to become meaningful, he acknowl-edged. “Our reputation will change when we get (this program) to matter.”

When a shareholder asked Lampert to grade the company’s execution of this platform, he said he “wouldn’t give us such a high grade.”

Edward Lampert, Sears Chairman and CEO.

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Profitability continued from page 6


Meeting DynamicsAbout 100 shareholders atten-ded this year’s annual meeting. There were no g raph ics or products on display in the room. A screen was set up on the stage showing the names of the of f icers a nd d i rec tor s o f t he company with a list of corporate entities.

Chairman Lampert began the meeting at 9:04 a.m. He introduced Ms. Kristin M. Coleman, senior vice president and general counsel, without making any opening statement. Ms. Coleman said that a quorum was established and that all directors re-ceived sufficient votes to be elected. She asked if there were any sharehol-der questions.

Shareholder Martin Glas-ser directed a question to Mr. Lampert. He asked, “Since you are downsizing the company, shouldn’t you also be downsizing the board of directors?” The board now consists of 10 members. Lampert responded by say ing, “Thank you.”

The seven-minute busi-ness meeting adjourned at 9:11 a.m. Chairman Lampert then opened the meeting up for questions. During this Q&A ses-sion the new appliance format, the problem with the Shop Your

Way program and the company’s partnership with other retailers were addressed.

Lampert said that in retrospect he should have closed more sto-

res earlier realizing that Sears had too much retail space. In addition, he added that soft lines

(apparel) was a losing proposit ion for Sears and should be broke-red out to other retailers with more experience, or space in Sears stores leased to such retailers.

A nd f i n a l l y, i n t he company’s big-box retreat to transition from a bricks-and-mortar retailer to a more nimble and less cost laden “omnichannel” com-pany, Lampert announced that Sears was closing its oldest department store. This would be the histo-ric Chicago’s Ravenswood facility that will shut in early August. A Kmart on the Southwest side of Chicago is also slated to close this summer.

As a result of all of the store closures, the company is going to increasingly focus on its best categories, the best stores and best customers in order to drive revenue, Lampert said.

Lampert combined Sears with Kmart in March 2005. Sales have declined for nine years straight, and the company has posted losses for the last five years, including a $1.3 billion loss in 2015.

The 2016 Sears annual meeting concluded shortly after 10:00 a.m.

First Small-Scale Appliance StoreMgr. Michael Wamsley gives Fort Collins Mayor Wade Troxell a sneak peek of the

Sears Appliance store near the Foothills Mall.

Profitability continued from page 7


Hello and Happy Birthday, Ernie!Ernie Arms, former national news director of Sears, Roebuck and Co., celebrated his 90th birthday last January. Ernie was N.A.R.S.E.’s vice president of electronic commu-nications for about 15 years. He was responsible for keeping N.A.R.S.E.’s website up-to-date with all the latest news about Sears and the retail industry. He retired from that position about nine months ago; however, he is still a member of our board of directors.

His three children, Karen, Chris-topher and David, surprised Ernie with a birthday party at his former retirement community at Sunrise of Willowbrook, Willowbrook, Il-linois, and invited friends from D/703, former neighbors and, of course, N.A.R.S.E. Since then, Er-nie has moved to a new resi-dence in Park Ridge, Illinois.

E r n i e A r m s began his news-paper career as a copyboy for the Akron Bea-con-Journal in Ohio at the age of 16 and be-came a reporter at the age of 17. At 18, the army called him to duty for in-fantry training.

A few months later, he was trans-ferred to Camp Butner, North Carolina, to help train infantry troops. After a short time, with his newspaper background, he became the editor of the Camp Butner News.

As fate would have it, a friend in-vited him to a Youth for Christ rally in Durham, North Carolina, about 20 miles from Camp Butner. As the group began singing at the youth rally, he asked the girl in front of

him, “May I share your book?”

She said, “Yes,” and after months of dating, he and Doris were married. World War II had ended, and they moved to Akron, Ohio, where he returned to his career as a reporter at the Akron Beacon-Journal.

A year later he became a reporter for the Columbus Citizen, and later headed up the staff of the women’s section of the newspaper. Follow-ing this stint, he joined the editing staff, and when the business edi-

t o r r e t i r e d , Ernie succeeded him. His daily columns won many awards.

During his time with the Colum-bus Citizen, he worked nights supervising the staff of the Ohio State University newspaper. He subsequent ly left the Citizen to become the assistant to the

director of the School of Journalism at Ohio State.

In 1959, as a result of his exten-sive newspaper background and awards he had won, he received a telephone call from Sears, Roebuck inviting him to Chicago for a job interview. Ernie was offered a po-sition as assistant to the national publicity director. He accepted the job and moved his family to Sears’ headquarters in Chicago to start a new career.

After a year heading up several programs in The Sears-Roebuck Foundation, Ernie was named na-tional news director of Sears. In addition, he was the public rela-tions director of Sears Tower from its construction to its opening in 1973. He held both positions until his retirement in 1990.

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Ernie and His Chocolate Cake

Gordon Jones D/703, John Blalock D/703, Ron Olbrysh D/766, and Kathy Gucfa D/703


Ernie and Doris had three chil-dren: a daughter, Karen Wendell, and two sons, Christopher and David. They celebrated their 68th wedding an-niversary December 12, 2013. Doris passed away in August 2014.

During Ernie’s bir th-day party, guests shared many memories of work-ing with him. One D/703 associate, Gary Klasen, who was unable to attend, sent an e-mail saying that working at 10 different companies and dozens of bosses, “Ernie remains the best boss I’ve ever had.”

Ernie and Kathy Gucfa, another D703 associate, coordinated all of Sears Tower communications. They were involved in numerous crazy issues. Kathy remembers receiving

a note in 1981 from “Spider Dan Goodwin” in advance of him scal-ing the tower. Goodwin innocently asked if one side of the building

went all the way from bottom to top. Kathy said it does, and he sure did. The police allowed him to fin-ish the climb and then took him into custody.

Two other memorable events were remembered: the Russian hockey team stealing from a Sears store in Alaska and then being successfully

shaken down by the store security team; and sadly, the abduction of 6-year-old Adam Walsh from a Sears store in Hollywood, Florida, which made na-tional headlines.

And of course, who can forget when the Chica-go Bears won the Super Bowl in 1986. Someone in D/703 (we wonder who?!) masked the “S” in Sears Tower on the monument block in front of the tower and replaced it with “B” so that it read, “Bears Tower.”

We wish Ernie well and thank him for all of his years of service at Sears and the significant contribu-tions he has made to N.A.R.S.E.!

Ernie continued from page 9

Ernie and Kathy. “I wonder who did this!”

It’s Not Too Late to Renew!If you have not done so yet, you can still renew your N.A.R.S.E. membership for 2016. Enclosed is a membership/renewal application form and mailing envelope. There is certainly strength in numbers. We need your support!

As a result of the decline in the number of local Sears’ local re-tiree clubs, N.A.R.S.E. is the only national independent organization representing the interests of Sears’ retirees today.

N.A.R.S.E. needs to remain strong and committed to this task. Your continued financial and moral sup-port of N.A.R.S.E. serves as our “Marching Orders” to not go away and is much appreciated.

If you have already renewed, then please pass the application form to someone who could benefit from membership in our organization. If you have any comments, sugges-tions or questions about N.A.R.S.E., you can contact either Ron Olbrysh, chairman, at [email protected]; or Tom Douglas, president, at [email protected].

N.A.R.S.E. is an all-volunteer as-sociation with no paid employees. We are funded solely by retiree membership dues and voluntary contributions. We receive no finan-cial support from Sears Holdings. The dues we collect are used to support our communication efforts

with the thousands of Sears retir-ees across the country.

Since so many of our local Sears’ retiree clubs have or are folding, our primary purpose for existence is to keep you informed on issues important to retirees, and to rep-resent you and be your voice to Sears Holdings.

This issue of Straight Talk could not be printed and mailed to you without your continued support and the support of many others who appreciate what we are doing.

Your financial support let’s us live up to the slogan first heard outside of the Art Institute of Chicago in 1998: We Are Not Going Away!


Art LevinGoodbye and Rest in Peace, Art

Art Levin, former president of N.A.R.S.E., passed away last March. Art was our organiza-tion’s president for about 13 years. His presence and signifi-cant contributions to N.A.R.S.E. will be missed.

He married his wife Laura in 1947 and graduated from the University of Rhode Island in 1951. The Lev ins had three daughters. The oldest, Nancy, lives in Nashville, Tennessee, and works as a merchandiser.

Joyce, the middle daughter, lives in Phoenix, Arizona, and is a re-tired elementary school teacher. Joyce cared for Art after his wife died, and he was in failing health. The youngest daughter, Linda, lives in Atlanta, Georgia, and is a registered nurse.

Art and Laura had seven grandchil-dren and five great grandchildren.

Art ’s career at Sears began June 25, 1951. He started in the receiving department at a Sears store in Massachusetts, and by the second day on the job he was unloading 11 tons of shingles.

In Fall River, Massachusetts, he moved into the auditing depart-ment. He then became the unit buying control manager. After that, he was the Division 33 man-ager and then promoted to the soft line manager. His next posi-tion was to assist in opening new stores. He opened stores in Glen Falls, New York; London, Con-necticut; Warwick, Rhode Island; and Plymouth, New Hampshire.

At each of these stores, he was assigned to Division 24.

Art was the first president of the Sears Retiree Advisory Council (SRAC) during the time retirees were protesting the taking away of their promised life insurance benefits. Alan Lacy, the last Sears, Roebuck chairman, formed this Council in 2001. Many believed Lacy created SRAC simply as a means of detracting interest from N.A.R.S.E., which was founded in 1997.

Levin was involved in numerous protests regarding the taking away of insurance benefits. He served a vital position as president of SRAC, the corporate retiree group and also N.A.R.S.E., the independent retiree organization.

In later years, he served as presi-dent of the Sears retiree club in Phoenix, Arizona. He also founded the Phoenix Chapter of the Uni-versity of Rhode Island Alumni Association, and served as its chapter president for many years.

Art and Laura both enjoyed golf and listening to classical music.

For a number of years, they both volunteered as ushers at the Phoenix Symphony and also sup-ported the Arizona Ballet and the Phoenix Opera.

During the 1990 and 1995 Arizona census, Art was an “enumerator” and canvassed neighborhoods collecting demographic, economic and housing data on behalf of the U.S. Census Bureau. More recently, he enjoyed being an as-sistant announcer at the LPGA.

In 2012, Art and Laura moved to Mesa, Arizona. Laura passed away in September 2013, and Art passed peacefully in his sleep on March 12, 2016.

God bless Art and his family.

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pany but agreed to stay on until a replacement is found. He plans to focus on “other business interests and pursue other career opportuni-ties.” He will continue as an advisor to Sears through January 31, 2017.

Schriesheim has been the architect of Sears’ creative cash-raising ef-forts, including spinning off real estate to securing more debt by pledging valuable store assets. He has conceded, though, that Sears’ results have been less than stellar.

The financial analysts who are still following Sears do not hold much hope for the company’s survival. James Brumley, InvestorPlace fea-ture writer, wrote:

“If Sears is to survive, it has to start doing the obvious: start selling more merchandise, which means it needs to draw more customers, excite them about the selections and get them to open their wallets. It’s admittedly easier said than done, but after … years at the helm, Lampert should know how to do it by now or know he can’t get it done. The outlook remains grim.”

What Do You Think?We would like to hear what you think about Sears’ last-ditch efforts for staying in business. Should it be selling some of its greatest as-sets—the Kenmore, Craftsman, and Diehard brands beloved by the American consumer? Chair-man Lampert puts a lot of stock in his transformation efforts. Do you think it will work and actually change the company’s operation? Or, is the company managing to find new ways to move in the wrong direction?

We will report your opinions about Sears’ survival in our next issue.

Can Sears Win the Fight to Stay Alive?Sears is imploding. The ballyhooed “transformation” has yet to take hold. The company most recently reported that its profit improved slightly in the last quarter due to trimmed expenses, but sales declined 8.3 percent. Kmart same-store sales dropped 5 percent, and Sears domes-tic same-store sales fell 7.1 percent

Some folks smarter than us have said that the com-pany is losing its last hope for staying in business. Sales are continuing to fall and the company’s one hope for survival—its home appliance busi-ness—is now in decline.

Chairman Edward Lampert now is considering options to expand the presence of the Kenmore, Craftsman and Diehard brands outside of Sears and Kmart, along with its Sears Home Services repair business. It has hired Citi-

group Inc. and LionTree Advisors to assist in its efforts, and in-tends to “aggressively evaluate” all of the potential alternatives.

The possible sale of these icon-ic brands is an alarming

sign for the viability of Sears’ retail business. “It is something of a tac-it admission that Sears doesn’t really see much

potential to grow these assets within its own re-tail business,” wrote Neil

Saunders, CEO of retail consulting firm Conlumino.

Saunders added: “This could represent the begin-

ning of the end for Sears as it starts to sell off its ‘family

assets’ in a bid to ensure that it re-mains solvent over the medium term.”

Sears CFO Robert Schriesheim, who joined the company in 2011, announced he is leaving the com-

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Fight continued from lower right

can retailers survive in this age of amazon? · for retailers that cut their brick-and-mortar...

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