LAMPERT’S VIEW ON REINVENTION AND ADAPTING: Edward Lampert, founder and chairman of ESL Partners and chairman of Sears Holdings Corp., believes retail is in need of reinvention. “I think companies, especially in retail, are finding themselves in the need of reinvention. J.C. Penney is in the need of reinvention. Sears is in the need of reinvention.…And that means that you’re going to have to try new things and if you’re unwilling to try new things and to fail and learn, you don’t have a shot,” he said during a segment on CNBC’s “Squawk Box” Wednesday morning.
Lampert said the same thing about change in the media business. “Whether it’s television, print media, online, mobile — people are trying to figure it out. It’s helpful to figure it out while you’re making a lot of money. If you’re not making a lot of money, your options become much more limited.”
He also noted, “People are adaptable. Companies are adaptable. You either adapt or die.…I think retail [is] going to be great and it has been great for the American consumer. The question [is] is it good for business? I think a lot of businesses will have profitless prosperity and we’ve got to adapt.”
Lampert thinks risk is coming back into the markets, and that people now want a return on their money rather than just worrying about a return of their money.
His comments were made during an interview by guest host Barry Sternlicht, chairman and chief executive officer of Starwood Capital Group. The interview was on the impact of legendary dealmaker Richard Rainwater on their careers to raise awareness of the degenerative disease PSP. Progressive supranuclear palsy is an incurable brain disorder that’s a cross between Lou Gehrig’s disease and Parkinson’s, with which Rainwater has been diagnosed.
Also commenting in the same interview was David Bonderman, founder of TPG. Bonderman, whose firm took J. Crew public and then private again, noted that what’s been changed by the Internet are distribution methods.
“What hasn’t changed is the value of brands….You can only buy J. Crew merchandise from J. Crew….The point is, you’re in one position. If you’re J.C. Penney and selling other people’s brands, you’re in a different position primarily because that person who controls the brand may choose to distribute in many different ways, including over the Internet, the Gilt Groupe. If you don’t have a brand and you’re dependent on someone’s else’s brand, you’re getting disintermediated by the distribution system,” Bonderman said.