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Sears Profit Margin Analysis

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Sears’ profit margin has been bouncing from high to low for the past ten years. An interesting point though is their profit margin was barely affected during the recession in 2008. If anything the recession was a better time for Sears. They were focused on “recession-friendly” advertising and with their layaway programs were able to still be selling higher priced products. They took advantage of the recession by challenging their external partners to deliver more for less. Also the recession took the focus off of Sears failing because all businesses were decreasing in sales. In 2009, Richard Gerstein, then senior VP-marketing at Sears Holdings, was quoted at saying, "A lot of things are coming together at the right time to help us succeed.” Their profit margin was at its lowest in 2012 resulting in a net loss of $500 million that year. One reason this could have happened was in 2012 CIT Group decided to not give loans to …show more content…

Many employees have given specific examples of how they are treated. Sears has shown its employees that it doesn’t care for them. Their commission rates are lowered by 50% on Black Friday. While this is only one day, this is the day most sales associates make the money to buy their families’ Christmas presents. Sears has been trying to save itself by cutting back as much as possible. This includes laying off employers and not applying raises. As said by the Harvard Business Review, “Unless employees grasp the purpose of the system, understand the economics of their company and industry, and have a clear picture of how their own work fits into the employee-customer-profit model, they will never succeed in making the whole thing work.” Sears is not following this idea, which is further pushing their company out of business. This also leads to a low moral that can greatly affect the success of Sears. Even one employee said, “Pay your people well, they will pay you back even

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