Grind for October 19th, 2018
“I believe that what we become depends on what our fathers teach us at odd moments when they aren’t trying to teach us.”
– Umberto Eco
Say goodbye to Sears
Sears will almost certainly file for bankruptcy on Monday when it fails to repay a debt of $134 million.
Sears stock dropped more than 50% last week to hit just 35 cents per share, and the company recently hired a new director familiar with bankruptcies. At least three brands that sell products at Sears say the company owes them money.
When Sears merged with Kmart in 2004, the company had $55 billion in revenues and more than 3,000 stores.
As of August, the company had less than 900 stores and $193 million in cash on hand.
Sears’s lenders have urged the company to shut down and liquidate, but according to CNN, executives are hoping to file for bankruptcy under Chapter 11 (rather than Chapter 7). This would give them an opportunity to restructure the business.
When former Kmart executive Edward Lampert took control of Sears in 2013, he believed he could outmaneuver rivals like Target by spending less money on remodels and expansions.
“Eddie came into the job with the view he was going to run a retail business his own way, and he did not believe in conventional wisdom,” said former Sears marketing chief Mark Cohen. “It didn’t work.”
Lampert lacked a grand strategy and insisted that all initiatives be thoroughly evaluated to determine whether the investment was justified.
What ended up happening was a whole lot of failed initiatives and underinvestment.
Between 2006 and 2017, Sears spent just 1% of revenue in capital expenditures. Compare this to Target, which spent 4%.
“When someone pulls up to a Kmart or Sears they don’t see ROI (return on investment),” says Cohen. “They see light bulbs that are burnt out, potholes in the parking lot, and a front door that looks like it was hit with a sledge hammer.”
China votes to legalize re-education camps for Muslims
The UN in early September issued a report accusing the Chinese government of detaining hundreds of thousands of Uighur Muslims in so-called “re-education camps,” where inmates were forced to learn Mandarin and memorize Communist propaganda.
Communist Party official Hu Lianhe in August told the UN there was “no arbitrary detention” and “no such thing as re-education centers.”
The UN demanded more details.
The Chinese government the week voted to legalize re-education centers, where inmates will undergo “idealogical education to eliminate extremism.”
In other words, detainees will be forced to abandon Islam and taught to behave like proper Communists. According to former inmates, that process involves physical and psychological torture.
“Sources say detainees face rough treatment at the hands of their overseers in the camps and endure poor diets and unhygienic conditions in the often overcrowded facilities,” reports Radio Free Asia.
The new law prohibits “abnormal beards” and “unusual names” and threatens to detain Uighurs who refuse to watch state-run TV or who fail to send their children to public schools.
GOOD TO THE LAST DROP:
Did you know… Some Chinese paramilitary police learn their ‘perfect posture’ with pins in their collar.