Theses built on monetizing hidden real estate, common with department stores like Macy's or Sears, often fail. The core operating business is frequently a 'negative EV' enterprise that destroys value faster than the underlying assets can be monetized, turning the investment into a trap.

CEO Sean Nelson reframes his company's early Chapter 11 bankruptcy not as a failure, but as an invaluable, real-world education. The experience provided a deep, practical understanding of contracts and high-stakes business operations that now informs his decision-making and gives him a unique perspective.

Sears' decline was epitomized by a CEO who felt like a "stranger" in his own stores and pursued abstract corporate strategies. In contrast, Home Depot mandated that every executive spend time on the floor, ensuring that strategic decisions were grounded in the reality of the customer experience.

Canadian retailer Leon's Furniture holds a valuable real estate portfolio, including prime development land, on its books for a fraction of its market value. A plan to IPO this real estate into a REIT creates a clear catalyst to unlock this hidden value, a common playbook for scaled Canadian retailers.

Sonder's bankruptcy wasn't due to its core idea of a standardized home rental, which was sound. The failure stemmed from raising too much venture capital ($680M), which created immense pressure for hyper-growth. This forced the company to sign unprofitable leases, proving a good business can be destroyed by the wrong funding model and unrealistic expectations.

Founder Sean Nelson reframes Chapter 11 bankruptcy not as a failure, but as an invaluable, real-world education. It provided a raw understanding of contracts, leases, and high-stakes decision-making that is impossible to learn academically. This crucible experience ultimately made him a more resilient and knowledgeable leader.

Corporate leaders are incentivized and wired to pursue growth through acquisition, constantly getting bigger. However, they consistently fail at the strategically crucial, but less glamorous, task of divesting assets at the right time, often holding on until value has significantly eroded.

Unlike a Chapter 11 bankruptcy where companies restructure, Sonder filed for Chapter 7, signifying complete liquidation. This meant an immediate shutdown and asset sale, causing thousands of guests to be abruptly evicted. The event serves as a stark real-world example of the severe and immediate consequences of this terminal form of corporate failure.

The core value of department stores like Saks was curating multiple luxury brands in one place. However, with brands like Louis Vuitton building their own flagship stores and generating 95% of sales directly, they have bypassed the middleman. This direct access to consumers makes the traditional department store model obsolete.