In the war for retail supremacy top Sears Holding brass continue to desert faster than members of the Iraqi military.  After parting ways with  Yum alum Alwyn Lewis, they have now seen the defection of the SVP of Home Services Mark Good and marketing chief Maureen Maguire.  They also lost Lands’ End chief David McCreight, who took the No. 2 post at Under Armour Inc. and Bill Stewart, Kmart’s chief marketing officer, who left in June to work on a campaign to protect gay marriage in California.  I met  both Maguire and Stewart last year.  My impression was that regardless of talent, it was difficult for them to function in an environment whose structure was defined by chaos.  Sears still has some some talent hanging on in the likes of head of Kmart retail chief Don Germano  and SVP of Supply Chain Robert Phelan.   How much longer they will tolerate Eddie Lampert’s “top to nowhere” management style or end up being the newest scapegoats is anyone’s guess.

Alywn Lewis left almost a year ago and has not been replaced.  His position has been filled in the interim by W. Bruce Johnson whose primary experience was in supply chain.  Word on the street is that Johnston is not a fan favorite of employees and is considered almost as aloof and out of touch as Lampert.   This can not be a good sign for quarterly numbers expected to be released shortly.  We should see another terrible quarter on the heels of the biggest quarterly loss since hedge fund guru Eddie Lampert took over the helm 3 years ago.

Sears top revenue generators are a telling sign of the bleak future.  While still the largest supplier of home appliances their market share is on steady decline to the benefit of of competitors such as Lowes and Home Depot offering better service and more aggressive pricing.  The loss of Home Services SVP Mark Good may be just as telling. His Home Services division was responsible in part for installing and repairing Sears appliances.  Good was widely considered one of Sears top talent acquisitions.  He was unable to turn around  a division already under constant attack for terrible customer interaction, shoddy response and scant part availability.  We could gasp and say that this is shocking and reflect on the once mighty Sears that supplied our parents and our grandparents homes but this spiral into complete retail irrelevancy was pre-destined from the moment Wall Street Hedge fund guru Eddie Lampert took over as majority shareholder and CEO.

In the retail industry same store sales is what Wall Street looks at to gauge how well as retailer is doing. It is not the final word in how well a store is really doing but for better or worse it is the bench mark. Edward Lampert prefers to use EBITDA (Earnings before interest, taxes, depreciation and amortization) as his benchmark. That is well and good for the egg heads. You can have all the MBA ’s in the world working for you but in the end someone still has to want to walk into your store and buy something. That someone then has to want to come back. That someone then has to want to tell others to come and check it out.  Its called customer evangelism.   That is the cycle every retailer strives for.  You want someone to buy your product and tell others to buy it.  You want someone to like your “brand” and tell others to check it out.  When consumers stop participating in that cycle irrelevancy follows.

In what could be the most telling sign of the last gasp of a once proud retail giant, Lampert did something he swore up and down he would never do to generate revenue.  Sears in true pre-bankruptcy Kmart form has engaged in across the boards Midnight Madness sales and other sales gimmicks designed to rid Sears of an enormous amount of excess inventory. Sears has been in continuous mark-down mode ever since.  We can expect this to be reflected in their 2008 2nd quarter numbers.  Never-ending sales, markdowns and gimmicks are signs of flailing companies not healthy ones.

Ironically there is a book out entitled “Kmart’s Ten Deadly Sins: How Incompetence Tainted An American Icon. (Kmart is now owed by Sears Holding Corp) In this book one of the specific areas of incompetent actions discussed repeatedly in leading to the downfall of Kmart was the use of excessive sales and clearance gimmicks to generate revenue and get rid of excess inventory and how this is a major sign of financial distress. Even more ironic is the book was given to me by a high level Sears employee when I was at their headquarters last year. I would have thought they were all reading the book to learn from prior mistakes. Eddie’s reign over Sears to  date has been an example of mistake after mistake.  Mistakes of arrogance, ignorance and simple stupidity.  Case in point-Eddie does the smart thing.  He brings in Alwyn Lewis from Yum who had a proven track record in both generating revenue and employee relationships.  He then in true monarch form, gives Alwyn zero responsibility, zero direction and zero autonomy.  This formula  will always translate into zero productivity.  He basically says:

“This is what I want to see happen but you cant make it happen without talking to me first and I don’t talk to anyone.”

Not long ago  I had dinner with an employee at SHLD who reported directly to Eddie Lampert. The employee confided to me that while everyone knew what Alwyn was brought in for, the general consensus was that no one knew what he was in fact doing or what his responsibilities were. He seemed to be a guy just “floating” out there with no real focus or impact.  Was that Alwyn’s fault? Absolutely not. I believe he was extremely qualified to help turn Sears around. I also believe that they will not find anyone out there more qualified to replace him which is why his position is still vacant.  When they do find someone it won’t matter.  The problem was not Alwyn.  The problem was Eddie Lampert’s total lack of understanding of retail and how to delegate.  He did not have that understanding then and unless he has undergone an epiphany in the last year, there is no reason to believe anything will change no matter who he sticks in there.

Eddie is about control. Eddie is about spreadsheets, data, algorithms, stock buybacks, numbers hocus-pocus, Ivy League MBAs, the latest Wall Street Journal book of the month, advance teams, posses, and entourages. In other words, he is completely out of touch.  In all fairness to him, he didn’t suddenly one day lose touch.  All those things he is about have made him a huge success in the hedge fund numbers crunching world where you don’t have to leave your office and don’t have to talk to anyone but the crunchers.  Until Eddie is ready to be a “regular guy” talking to “regular customers”  in the trenches the only big change at Sears Holdings will be when he unloads bits and pieces and finally dumps at “Midnight Madness” prices.

At this point, does anyone really even care?

How often can someone claim that they changed the way we view the world.  Deborah Fidel and the Zionist Organization of American (ZOA) can do just that.  They took the  battlefield against  Internet media giant Google against the backdrop of the on-going border conflict between Palestine and Israel.

Google Earth is a virtual globe.  It maps the earth by the superimposition of images obtained from satellite imagery, aerial photography and other sources.  It allows a user to pick almost any place on earth and zoom in on many different levels.  One feature of Google Earth allows users to create “layers” – overlays of data, photos, political concerns, environment data, etc. – on the basic map.  This allows as user to add subjective interpretation and opinion on numerous aspects of a particular town, city or other location and post it on “Google Globe”  This can be particularly thorny when a user posts information that goes to the very core of a global border dispute such as the one between Israel and Palestine.

The  conflict began when a guy by the name of Thameen Darby, inserted notations on the Google Earth map(see below)  stating that the Israeli city of Kiryat Yam had been built on the location of the displaced Arab town of Ghawarina.  If you look at the Google Earth map as it existed after the notations you will see the city of “Arab Ghawarina” including the following flag notation:

“This is one of the Palestinian localities evacuated and destroyed after the 1948 Arab-Israeli war. For basic information about this locality, including brief history, the 1948 events, its current status, pictures and statistics, visit: www.palestineremembered.com.”

This did not go over well with the town of  Kiryat Yam.  It is a blue collar town trying to become a preferred resort destination.  Having an Arab city with such an inflammatory notation overlayed on a map viewed by millions was not going help the cause.  It was their position that even from a historical context the placement and notation were false.  They claimed the area in which the city is located was barren dessert prior to its inception and that  Jews settled it well before the establishment of the State of Israel.  Darby stated that he was placing the notations to give historical context allowing displaced Palestinians to understand their heritage.

Officials of Kiryat Yam made repeated demand on Google to remove the alleged erroneous information from the map.  Google earth responded that it was its policy not to remove user-generated content unless the content was illegal.  The town and the historical notations would stay.  Kiryat Yam responded that the false placement of the town and the false historical statement may in fact be a violation of Israeli law. The town threatened to sue Google for misrepresentation under Israeli law.  Google refused to budge and made the following statements:

“Both Israeli and Palestinian perspectives are posted on the map of Israel, and there are other places of controversy in the world map besides the Middle East”‘

“While we recognize that some may find the user generated content objectionable, we are careful to balance the integrity of an open forum with the legal requirements of local governments. It looks as though this particular user-contributed annotation does not breach our Terms and Conditions nor is it in any way illegal. The Google Earth community layer is a place where people can tag their knowledge or opinions of a location. Their comments are clearly indicated with the ‘I’ icon and this layer can easily be switched on and off.  We believe the majority of people use the community positively to share their expertise and experiences…

The ZOA position was that Google Earth by allowing the placement of “Arab Ghawarina” to stay was engaging in a process of allowing the borders of Israel to be distorted.  It was also creating revisionist history to the benefit of Palestine by creating a “Google Global” perception that Israel is in the wrong in the on-going border dispute.  The ZOA press release states:

On July 15, 2008, the ZOA sent a letter to Dr. Eric Schmidt, Chairman of the Board and Chief Executive Officer of Google Inc. (Google), with copies to Sergey Brin and Larry Page, Google’s Co-Founders criticizing Google for knowingly permitting Google Earth to:

“become a vehicle for promoting false and demonizing political propaganda about Jews and Israel.”

In the end the ZOA prevailed.  Google agreed to remove the offending layer and historical notation. If you now input the town of Ghawarina into Google Earth you will be taken to the layer of “Not Arab Ghawarina”. The flag notation now reads:

“The 1880 Palestine Exploration Fund map designates a region by this name east of Acre. This area is populated with Israeli Arabs. The map does not have any towns here.“

I had the opportunity to interview Deborah Fidel of the Pittsburgh Branch of the ZOA.  She was actively involved in convincing Google to remove the remove the town as well as the historical flag in question.  Deborah had this to say:

“I saw the problem; we wrote a letter to Google CEO signed by Mort Klein(pres) and Susan Tuchman, Esq., director of our Center for Law and Justice saying that the site was misleading users into thinking that they information they see is endorsed by Google, when it is user generated.  We demanded a disclaimer at the least, and a change in the system whereby some posts gain more prominence than others by virtue of their technical ‘elegance’ without any regard to accuracy or reliability.  Apparently, they were convinced.  ZOA changed the way 400 million people see Israel – literally! “

Dr. Andre Oboler is a  post-doctoral fellow in the political science department at Bar-Ilan University and Legacy Heritage Fellow at the NGO Monitor watchdog group. He stated:

“Israel is being specifically targeted. No one else is running a campaign against a country like this… Google needs to review their policy for the community content layer, perhaps dividing it up or further restricting it to content about current significant locations and landmarks”

In the end has anything really changed?  Should the notation have been allowed to stay?  The dispute underlays a larger issue. When someone looks at a map does that person automatically assume anything information contained within the map to be accurate and objectively researched?  If the answer is yes, maybe Google does have a larger responsibility than they profess with regards to the method and type of user data  uploaded to Google Earth.

I attended my niece’s 2nd party party yesterday.  When I went over to my brother’s  home and they had the Olympics on.  Other than newscasts this was the first live Olympics coverage I had seen since the games began.  I was on a self imposed boycott of Olympics coverage.  I had begun to lose interest in the Olympics every since the “Dream Team” won their  basketball gold in the 1992 games.   The problem is that I am stuck in the 80’s.  I remember sitting in the television room of my dormitory at Penn. State University in 1980. I was cheering wildly as the undermanned, unknown and all amateur United States Hockey Team convinced me that miracles do happen.  At the time I did not realize that at least from a United States standpoint, the age of Olympic miracles would soon be coming to an end.  In 1989 the Olympic committee voted to allow professionals to compete.  Interestingly the United States voted against it.  That was the day at least for me that the Olympics stood still.

I have no idea whether the Winter Olympics were all about money and ratings in 1980.  I was to young and naive to care. I know they became a slave to politics later that same year.  I was even younger and more innocent in 1972 when the  world was riveted to their televisions watching the United States men’s basketball team take on the more experienced Soviet team. They took the Soviets to the wire in a wild controversial loss that almost caused the breakout of war.   What I do know is that after 1989  I began to  see professional athletes playing for countries they have not lived in for years. I began to watch athletes who make millions playing for pay turning the Olympics into the NBA/Europe summer league or the NHL/Europe Winter League while the “miracle makers” of the future sit at home and watch along with me.  I now put in my dvd of the 1980 Olympic Hockey team and reassure myself that at one time I was young enough to be deluded that it was about miracles and the hope that we could stick it to the Russians and other countries who had been using their professionals all along. I never cared that they were doing that because it meant so much more when we beat them. Do those rivalries even exist anymore?   Most people old enough to have watched the Winter Games in 1980 can recite the coach and many of the players on the 1980 hockey team.  How many people can name the coach and players on the last mens basketball  gold medal team in 1996?  Probably not as many who can name the Olympic Bomber.

There is no question that stories such as Michael Phelps are great Olympic feel good stories that makes us all feel patriotic although it is a different type of patriotic feel than the battle against the evil Soviet empire in 1980. Never underestimate the power of a good “cold war” to bring the masses together.  There are still sports in the Olympics that have not been distorted by million dollar mansions and Mazarattis. I hear Donald Trump has purchased the naming rights to the next Summer Olympics.

Jews are at war.  Spies are at work. Conspiratorial plots abound.  Government agencies are storming the gates.  Casualties are expected.  A battle of epic proportion not seen since Joshua blew down the Jericho walls.  It is not taking place on the disputed Gaza Strip but in the small rural town of Postville Iowa.  Postville is the location of the Agriprocessors kosher meat packing plant.  It has become the site of of a battle between the owners of the plant and some very strange bedfellows over allegations of misconduct including violation of child labor laws, providing false residency documents to illegal alien employees, slush funds for illegal employees, inhumane slaughtering of animals and even allegations that the plant has been used as a “meth lab”.  The plant has been infiltrated by PETA spies, overrun by invading hoards of Immigration and Customs Enforcement(ICE) agents, under occupation by “roving Somali insurgents”  and is allegedly under scrutiny by the DEA.  A battle scenario worthy of a Tom Hanks lead.

In May, 2008 Immigration and Customs Enforcement agents(ICE) raided the Agriprocessors(AG)  packing plant arresting 398 illegal aliens.  It was the largest such raid in United States history.  State and federal officials have also accused AG of using illegal child labor labor.  They allege that as many as 57 children, ages 14 to 17, were illegally employed at Agriprocessors Inc.’s Pottsville plant.  In addition to all of the illegal employees, two plant supervisors were ultimately arrested and have trials pending.  Animal cruelty charges have been dogging AG for years.  Members of People For The Ethical Treatment Of Animals(PETA) were able to infiltrate the plant and obtain video of the conditions surrounding the company slaughter practices.  The PETA  website posted the following statement:

“PETA’s investigator witnessed egregiously cruel slaughter methods being used at an AgriProcessors kosher abattoir in Postville, Iowa, in the US. Cattle, chickens and turkeys suffered through prolonged consciousness after having their throats cut and being dismembered while still fully conscious. Many instances of inhumane slaughter were captured on film.”

The website goes on to provide graphic details as well as video.(viewer discretion advised)  Did Peta do anything wrong when they infiltrated the plant and took video documenting animal cruelty?  Whether we like it or not, snitches, infiltrators and informers are what make the wheels of justice turn.  Without tattletales 75 percent of crimes would go undiscovered.  Claims of illegal drug use have been thrown into the mix including allegations that methamphetamine was being manufactured in the plant.

The allegations against Agriprocessors has have caused much consternation in the Jewish population.  The company is Jewish founded and owned.  It has strong ties to the Jewish Community.  The allegations have caused leaders in the Jewish community  to question what it means to keep kosher.   It has lowered the level of trust that the food on their table is in fact kosher.  This re-examination of values should concern Agriprocessors.  The kosher meat market is multi-billion dollar industry of which they hold a substantial market share.  A loss of confidence in the kosher slaughtering methods and other moral mandates of Jewish religious and dietary practices could have devastating financial impact Agriprocessor’s bottom line  as well as its employees and the town of Postville Iowa.  It goes well beyond Jewish issues and hits on a shattered town dependent on the plant for its survival. There are also the basic laws of economics dragging on AG.  If your target market on longer feels good about your product, demand goes down and profits follow. Agriprocessors disputes that the allegations will hurt their business or reputation in the long term.  In a recent public statement, Chaim Abrahams, the plant’s purchasing manager, said the company has seen no decline in demand for its kosher products. He went on to state that the company operates in an ethical manner.

If true the various charges slice right to the heart of Jewish dietary kosher laws or” Kashrut“.  The allegations  have become part of a backdrop to active discussion within the Jewish community about what it means for food to be prepared in accordance with Kashrut.   Does it simply refer to the manner in which the animals are slaughtered which goes directly to the animal cruelty claims of PETA?   Kashrut in part specifies that animals not suffer in the slaughter process.  AG would point out that it has passed successive audits of its slaughter practices. I view such internal audits with skepticism.  What do you do when you have a weeks notice that your boss is flying in from corporate?  You clean the place up!   An internal audit with the goal of finding procedural compliance will almost always find its way to the past of least resistance and find all in order. The only true surprise audit is one done by the IRS.

Do the allegations against AG  encompass more of a human process than a simple slaughter procedure as to Kashrut?  Do allegations of illegal labor, false documents and alleged employee mistreatment factor into the kosher mix?  How many times do we as consumers give active thought to the human factor behind the manufacture of a product in our hands?   We generally do not give it much thought at all unless allegations are brought to national attention through spies, infiltrators and informers.  The allegations have sparked a spin-off  Kosher Justice Movment in which looks beyond the singular manner in which the food is prepared but to overall the manner in which it gets to the table.

Does any of the above matter in the greater, “religion blind” scope of social morality?  Strip away the mudslinging.  Strip away religious and cultural outrage.  You are still left with allegations of behavior that if true can not be tolerated on any level.  Animal cruelty is a crime. Using child labor as slave labor is a crime.  Conspiring to provide and actually providing false immigration documents to illegal aliens is a crime.   At most the owners are guilty of conspiratorial criminal conduct punishable in a courtroom free of religious influence.  At a minimum they are guilty of what amounts to “criminal ignorance” of what is going on in their company.  The federal investigation continues.  The two highest ranking employees arrested in the raid have just recently argued that their trials should be moved from Des Moines, Iowa due to the massive publicity.  Both supervisors have been charged with encouraging illegal immigrants to reside in the United States and with aiding and abetting the possession and use of fraudulent identification. One has also been charged with aiding and abetting aggravated identity theft. Those further up the food chain at AG have to be holding their collective breaths for the dreaded word that a “Rat Out Michael Vick” type plea agreement has been reached. You can bet their has been brutal pressure on these guys to serve up some big wigs.

Has Agriprocessors been singled out for prosecution?  When over 50 percent of your workforce is illegal you have not been singled out, you have been caught.