Sears Bankruptcy Hits Close to Home for Trump
(Bloomberg) -- The bankruptcy of Sears Holdings Corp. hit close to home for one American: Donald Trump.
The U.S. president said Monday that Sears’ bankruptcy filing was a “very, very sad moment” and a “shame.” Although the U.S. has been facing a retail apocalypse in recent years, including Toys “R” Us’s failure, Trump has largely avoided discussing specific chains publicly.
Trump’s relationship with Sears may go beyond his connection to other stores. Sears and its Kmart stores once sold Trump-branded goods online, and third parties still sell goods linked to him in Sears’ online marketplace. Trump famously shopped at Kmart with his ex-wife Ivana in 1991, when he was helping Trump Jr. move in to his dorm at boarding school. (When the store didn’t accept his American Express card, a credit card it didn’t take at the time, he paid with cash.)
“Sears Roebuck when I was growing up was a big deal,” the 72-year-old president told reporters Monday morning as he departed the White House for Florida.
Steve Mnuchin, Trump’s Treasury secretary, was on Sears’ board of directors between 2005 and December 2016 and on Kmart’s board before that. Mnuchin and Edward Lampert, the hedge fund manager who engineered the combination of Sears and Kmart and was chief executive officer of the company when it filed for bankruptcy, went to Yale together.
There’s more to Trump’s relationship with the company, said Daniel Raff, a professor at University of Pennsylvania’s Wharton School who has written about the retailer. Sears has a long history of catering to blue-collar workers, key constituents for Trump. The store’s decline in the 1980’s came in part because of the falling fortunes of that class of Americans, Raff said.
“This expressed nostalgia may well resonate with his core voters," Raff said.
The 125-year-old retailer filed for Chapter 11 bankruptcy protection early Monday morning, saddled with billions of dollars of debt as it struggled to adjust to the rapid shift toward online consumption.
Trump said the company was “obviously improperly run for many years.” But he said he “would imagine” some of the retail chains’ locations would be “put to good use.”
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