The Break-Up of Business Mergers
Sears and Kmart
The success of low-end big-box stores like Target and Walmart, and high-end department stores like Saks Fifth Avenue towards the end of 20th century made Sears feel slowly failing and stuck. Hedge-fund investor Eddie Lampert purchased both a failing Sears and Kmart in 2005, and merged them to become Sears Holdings. However, Sears Holdings continued the downward spiral of both companies. Some blame their focus on soft goods. Others think Sears tried to compete with mega giant Walmart with a variety of stores, Sears Essentials, for instance that were utter failures. By 2007, Lampert was named the America’s worst CEO, and Sears Holdings remains on the brink of utter failure, especially in light of the recent recession.
Mattel and The Learning Company
Mattel has remained a childhood staple for decades, and in 1999, it attempted to tap into the educational software market by scooping up almost-bankrupt The Learning Company (creators of great learning-is-fun games like Carmen Santiago & Myst). Less than a year later, The Learning Company lost $206 million, taking down Mattel’s profit with it. By 2000, Mattel was losing $1.5 million a day and its stock price kept dropping. The Learning Company was sold by the end of 2000, but Mattel was forced to lay off 10 percent of its employees in order to cut costs.
