On Your Side Investigation: Sears goes after locally owned store
A new store might not make it in Bolivar. It's not because sales are down or they can't hire good help. It's bigger than that. It's all in the fine print.
Matt and Malinda Goforth say it's an on-going, uphill battle to keep the doors open. "They have promised they will take it all the way to the end. And their desire is to see us go out of business," said Matt Goforth.
'They' is Sears Authorized Hometown Stores. Goforth used to operate a Sears store here. Last fall the corporation filed for bankruptcy. In the spring, Goforth decided not to renew his contract.
"Once the bankruptcy occurred and it had such an impact with Hometown then we decided there's no way we are going to do it whatsoever," he said.
Goforth's attorney sent Sears a letter claiming Sears Hometown 'breached the agreement' for failing to delivery inventory on time.
"Some things were dragged out up to three months trying to get product to clients who had paid for that product," he said.
The doors closed in July when the contract ended. Then a few months later, his wife decided to open the doors again. This time with a new business, Goforth Home & Lawn. Sears Authorized Hometown Stores argues that violated Goforth's non-compete agreement and want him to pay nearly $1 million. It's now in arbitration. The documents aren't public, but Goforth showed them to On Your Side.
"They're just doing it out of spite for no other reason. They have no intention to book a business here in this town," he said.
It boils down to a clause in the 47 page contract Matt Goforth signed before he married Malinda. And before Sears filed for bankruptcy in 2018. It reads: Two years after this agreement neither owner, controlling owner, owner's affiliate nor any member of owner's immediate family will run a competing business within fifty miles.
"I don't think that's fair to tell a market, or a town or a city or a place like this, 'Hey, we are going to run them out of business and we may or may not come there in two years, but we got two years to figure it out," Goforth said.
Sears Authorized Hometown Stores hired a private investigator to check out the new locally owned store. The investigator interviewed people about Malinda.
"I haven't done anything wrong. I don't have anything to hide. You can investigate all you want I guess," she said.
Goforth Home & Lawn does sell some appliances you'll find at Sears, but there are different items too.
A public relations person for Sears Authorized Hometown Stores told On Your Side, 'no comment' but their attorney, Ric Cohen, issued this statement.
"As the arbitrator's ruling today shows, this is not a battle between David and Goliath. This is simply Sears' effort to ensure that a former dealer—who has enjoyed all of the benefits of his agreement for years—lives up to the commitments he made in exchange to Sears. Sears has proudly served the Bolivar community for decades. It seeks only the opportunity to continue to serve the community that the former dealer promised Sears would have when the agreement ended."
The arbitrator ordered Goforth Home & Lawn has to stop selling merchandise related to Matt's old contract and pay attorney fees and expenses. Matt and Malinda say they plan to appeal this decision. The other financial matters, like the $1 million, will be discussed later.