As Sears inches closer toward dissolution – the embattled retailer just barely avoided liquidation plans on Tuesday – billionaire investor Warren Buffett also comes even closer to a prediction he made more than a decade ago.
The chairman and CEO of Berkshire Hathaway warned 13 years ago, during a conversation he had in 2005 with students from the University of Kansas, that Sears Chairman Eddie Lampert’s venture in merging Sears and Kmart was unlikely to succeed, as first reported by Business Insider.
“Eddie is a very smart guy, but putting Kmart and Sears together is a tough hand,” he said at the time, according to The New York Times. He noted that few retailers that lagged behind competition ever truly revived their businesses.
“We would rather look for easier things to do,” he said.
Sears’ bankruptcy attorney said on Tuesday the retailer will move forward with its planned auction, set for Jan. 14, averting liquidation plans that were supposed to be announced earlier in the day.
The decision was predicated on the condition that Lampert’s hedge fund provide a $121 million deposit by Wednesday, as the former CEO makes a last-ditch effort to save the company.
Sears filed for bankruptcy in October and has since closed hundreds of stores as it attempts to restructure and restore profitability. As part of its bankruptcy deal, the once iconic retail chain said it would close more than 170 of its 700 stores by the end of last year.