Sears, The World's Largest Department Store, Applied For Bankruptcy Yesterday.

Sears chairman Eddie Lambert's efforts were not wasted, and nearly 50 thousand employees' rice bowls were finally saved at the last minute.

The old department store in the United States filed for bankruptcy in October last year because of its predicament.

But chairman Eddie Lambert did not want to give up 425 branches and nearly 50 thousand employees.

The billionaire has been running around in the hope of rescuing the company with his hedge fund ESL.

In the end, ESL added $150 million to win the US Department store for about $5 billion 200 million in bankruptcy auctions, and will continue to control its 13 years.

Sears temporarily avoided the fate of bankruptcy and liquidation, and won valuable time for Sears's pformation. However, he could not change the trend of traditional retail decline.

Experts say the problem of letting the retailer get into trouble is still there, and there is little hope of change.

The industry believes that with the gradual loss of passenger flow in department stores, and the possibility that the whole industry will lose profits in search of expansion due to structural problems, there may be little hope that the entire department store industry will be able to reverse.

This is not the first time that Eddie Lambert has faced such a situation.

He has offered billions of loans to the company in the past few years as president of the company.

A spokesman for Lambert's hedge fund ESL said: "with the approval of the court, our continuing business proposal will provide a total consideration of more than US $5 billion 200 million and retain tens of thousands of jobs.

It will also provide funds for certain severance payments during Sears's bankruptcy and restore the welfare of eligible employees in the new company.

In addition, it will honour the commitment of loyal customers who purchase extended warranty products and support the affected suppliers, who will retain a valuable source of revenue. "

In more than 120 years of history, the most brilliant moment of Sears's department store is that its annual revenue has accounted for 1% of the US gross domestic product and has reached the top of the world's largest department store in one fell swoop.

However, in recent years, with the rapid rise of Internet retailers such as Amazon, the old retail businesses in the United States are doing poorly and are heavily indebted.

Sears, a company with more than 68 thousand employees, had to apply for bankruptcy protection in bankruptcy court in October 15th last year. Its last chance to survive is probably the $5 billion 200 million takeover proposal.

Informed sources said that ESL was the only one who proposed the acquisition of Sears as a whole.

According to the analysis of the Washington Post, Sears was once a great enterprise and a symbol of originality and imagination in the United States.

But businesses are constrained by the business cycle, and no enterprise can guarantee immortality, no matter how innovative or powerful it has been.

Neil Sanders, managing director of GlobalDataRetail, points out that although the shrinking Sears will be more viable than the struggling big companies, we are still pessimistic about the future of the chain.

In our view, Sears faced almost the same problems as he applied for bankruptcy protection when he quit the process.

In essence, its cards have not changed, and the cards in their hands are not winning cards. "

Some analysts say that Sears's going to the end has a lot to do with Lambert's erroneous decision making.

Lambert is not interested in retailing itself, and has not actively adjusted to revitalize the retail business itself to adapt to the consumer trend of online shopping.

He not only relentlessly abandoned the "trump card" Kenmore electrical appliances, Diehard batteries and Craftsman tools, but was reluctant to invest in refurbishing stores, and invested most of his funds in expanding insurance, financial services and real estate business, which made the company bloated.

At the same time, huge debts have further restricted its pformation.

According to data from Bloomberg, Sears has lost $10 billion since 2012, making it difficult to compete with Amazon.

As of last September, Lambert and its ESL investment company held approximately $2 billion 500 million in debt to Sears.

When entering bankruptcy protection procedures, Sears stores and its Kmart chain carry 11 billion 340 million dollars in debt.

When Sears was in the ascendant, he met his first enemy, WAL-MART.

It's also a shopping mall, and WAL-MART has built a whole set of supermarket business models.

WAL-MART shops in the suburbs and near the highway in order to reduce its operating costs, adopt a flexible supply chain management mode, and continuously reduce the price of goods with a large number of purchases.

When WAL-MART's supply chain cost was less than 3%, Sears gradually formed a rigid aging supply chain system because of the long-term accumulation of success. The cost of goods storage and pportation accounted for 8% of the total sales.

According to the the Atlantic monthly magazine, Sears's revenue was 5 times that of WAL-MART in early 1980s, but it only had half of WAL-MART's income in 90s.

Later, the rise of the electricity supplier began to divide up the share of the retail market.

When Sears and WAL-MART competed, when the US internet bubble and Internet companies rose, and when the major retail enterprises moved to the battle line, Sears took the lead and merged with another troubled retailer, kemate, forcing the two companies with different positions to knead together and set up Sears Holdings (SearsHoldings).

In addition to breaking away from the core business and losing the electricity supplier, Sears's "sticking to tradition" is also an important factor for its demise.

Sears's products can not keep up with the times, there are a large number of outdated products, for profit and do not want to do a lot of clearance. After merging with Kat Matt, the progress of data and system integration is slow, and eventually it is farther and farther away from young consumers.

When Sears fell into the vicious circle of self consumption, he was unprepared to wait for a break. He was accustomed to the rapid changes in the capital market. He could adjust the management level if he could not see the profit. He changed three to CEO in eight years.

Christina Boni, vice president of Moodie, said: "Sears's restructuring of the smaller scale stores will still face major obstacles to its long-term business.

Scale is crucial to the competition in today's retail industry, but it lacks scale, and its core customer claims remain questionable.

Sears has been reducing the size of stores and reducing costs in recent years, but sales trends and profitability are still difficult to improve.

Sears's tragedy may be the epitome of today's traditional retail industry.

How to pform to the traditional retail industry is the key to survival or death.

In fact, the essence of retail is, in the final analysis, how to attract consumers.

In the era of electricity supplier rampant, to attract consumers, we should not only do digital pformation, but also find out who is the core consumer group.

Ram Charan, a world-renowned management consultant, said that if the traditional enterprises could not meet the real needs of consumers without digitalization, there would be no future for such enterprises.

Because consumers now need cheaper, more convenient, and even "now" products and the ultimate experience.

According to the economist, companies are increasingly catering to the tastes of young consumers.

The world's top consumer company P & G's move on intellectual property shows how big companies are eager to attract millennial consumers.

Procter & Gamble applied to the Federal Patent office last year to apply LOL, NBD, WTF and FML abbreviations commonly used in short messages and social media as trademarks of their products.

If approved, the 181 year old company plans to use these symbols to sell soap, detergent and air fresheners to young consumers.

The economist points out that for many companies, the millennial generation is a mystery.

KPMG, a consultancy, estimates that nearly half of the companies do not understand how the millennial generation (usually born between 1980 and 2000) is different from the previous generations.

This is probably because the differences are exaggerated.

Ipsos-MORI, a pollsters, said the millennial description of all the surveyed groups was "the most careless".

Much of what they say is too simplistic or wrong.

For example, people often say millennials do not look at traditional advertisements, but in fact, they are deeply influenced by marketing.

With these misunderstandings, it is not surprising that enterprises sometimes fail.

In February this year, MillerCoors, an American brewer, launched a fruit flavored light beer TwoHats, which is suitable for the taste and budget of the Millennials. Miller

The slogan is: good and cheap beer.

Wait a minute, really? The result is that the consumers are just waiting.

6 months later, the beer was cold.

According to the economist, there are basically three ways to achieve success in marketing products to the millennial generation: pparency, experience and flexibility.

First, in terms of pparency, young brands are already leading the trend.

In the clothing industry, the clothing business Everlane in San Francisco is an example.

As part of its "thorough pparency" philosophy, the company voluntarily disclosed the production conditions and production profits of each garment produced.

ConAgra, the US food giant, simplified the composition of the food produced and removed all artificial ingredients from many snack foods and instant snacks.

After years of declining sales, the company began to grow again, while the millennial generation contributed 80% of the new customers.

"Attracting these groups is very important for brand development," said Bob Nolan, senior vice president of corporate insight and analysis.

Compared to buying things, the millennials are more willing to spend money on "experience".

Online platforms such as Audemars Pigeut greet Airbnb make full use of young people's preferences - willing to spend money on holidays, dinners and other activities that can be used to photograph photos in social media.

Compared with previous generations, young consumers have more debt, less assets and lower job security.

In this way, flexibility becomes very important.

The millennials are also committed to fear, and businesses are also upgrading their business models, such as general motors, Volvo and BMW, which offer car rental services to customers, so that customers can use new cars without paying long-term debt burden.

Laura Baudin, partner of Bain, a consulting firm, said many companies still have too many views on the Millennials.

"If you want to resonate with a group that is predominant by diversity, it's not feasible to rely on thousands of people."

She said some companies have taken into account the personality of customers.

Last May, Italy world bank brand Gucci launched Gucci DIY activities, including a popular handbag and sneakers to provide personalized service.

According to reports, Gucci has a think tank composed of employees under 30 years old to advise the company.

Although Sears avoided the fate of bankruptcy and liquidation for a while, he won valuable time for Sears's pformation, but it can not change the trend of traditional retail decline.

The problem of causing the retailer to get into trouble is still there, and there is little hope of change.