Monday, June 17, 2013

I guess it was only a matter of time.

Orchard Supply Hardware just filed for bankruptcy. Of course this is a predictable moment. My track record for predicting the the failure of these stores has been scarily good. Which sounds gloatish. But I think in this case I deserve to gloat a little. I saw them all loading up on appliances at a time when these types of products weren't turning over very quickly. Or at all. Even worse, stores like OSH had all of Sears appliances taking up their floor space, and they couldn't even change the prices to get them to move faster. Sears was basically leasing floor space from OSH, and they had no control over pricing! Very large areas of their stores proportionately were filled with items that turned over very slowly. It doesn't take much smarts to figure out there would be a bad outcome with this ridiculous business agreement.

It honestly seems forever ago, but it was just six months ago I talked about this topic. Here.

I guess Lowes might try to take them over. To what end, I can't imagine. Seems like a lot of duplication to me.


  1. This smells a little fishy. A good example of how they slice and dice companies up to save the powerful, at the expense of retail investors.

    Not only was Sears able to spin OSH off w/ a chunk of their own debt, but then sell the lionshare of their equity in the co. over the last 18 months. I can't imagine what Lowes would want with them either, but it makes me wonder whether their other spinoffs are also doomed to failure. Maybe if we're lucky, they'll decide to spin Kmart out next -DF

  2. No way! They got them to absorb some of their debt and offloaded some of their inventory on them. Crafty in an evil way.

    I can't believe Kmart is still alive, but then they owned all that real estate, and that is what saved them. I wonder if that is what interests Lowe's too. Osh has been around forever. They have to own most of those buildings. At least I would assume since they are all pretty much in old properties. They have to be worth at least 200 mil. The alleged offer from Lowe's.

    I thought this was a scenario where two bad companies married. Because Lowe's isn't doing that well either. Your add is way more interesting though.

    Oh! besides Kmart, what other spin-offs do they have? I want to start looking at them.

    That Sears thing is amazing/devious. I can't even believe Sears is still alive. Every time I go in there I feel like I'm being transported to the 70's.