Why Not Eliminate All Overhead And Let The Stores Run Themselves?

Implications: I have (had) many friends working at Sears' Hoffman Estates headquarters,(most now gone) and to the man, (or woman) they have some of the scariest horror stories I have ever heard, about the conditions that prevail under Mr. Lampert's leadership. This latest round of layoffs is just one more indication of how desperate conditions have become. It was revealed in this latest article that the three most important departments required for a successful turnaround, bore the brunt of the layoffs. Operations, Store-Support and Logistics have historically been Sears "neediest" areas. Store management and trade journal writers  have long compared these areas unfavorably to the superior workings of comparable departments at Wal-Mart. Most observers in the Chicago area, many with close ties to Sears or to Sears employees, are unified in their belief that not only has Eddie started cutting into the muscle, but is actually now cutting the bone.

Analysis: Even the most aggressive retail managers know that cost cutting is a game of diminishing returns. It can make you look heroic for a short while but after the first year when the remaining headquarters staffs doing two or three jobs of their fallen coworkers, layoffs start costing far more than the salaries saved. 

I watched the same pattern emerge at Wards when they started "circling the drain".  In fact, the similarities between the desperate behavior of Mr. Lampert and and his exact counterpart, Mr. Brennan, is remarkable.

For those looking for a template of how fast and how steep SHLD's downward spiral is likely to become, I can think of no better "bathroom reading" than to look up the articles about the last two years prior to Ward's demise.