BusinessWeek's Bob Reed wonders about Eddie Lampert's stewardship of Sears Holdings Corp. (NYSE: SHLD), the parent company of Sears and Kmart. While investors were buoyant about the company's prospects less than a year ago, due largely to Lampert's stellar track record as a hedge fund manager, things have soured. Sears has reported lackluster results, and the retail turnaround appears to be like most so-called turnarounds: not much is turning. Meanwhile, the stock is down about a third from its high.Reed has this to say about the future of the company: First, consider this possibility: Lampert makes good on his word that he is going to transform Sears Holdings into a dynamic, successful retailer. He pours cash -- lots of it -- into operations, stores, and marketing. More important, he hires a top-notch merchant, a superstar executive to spotlight the five, six, or seven core retail strengths that Sears still possesses, and then embarks on a 5- to 10-year rebuilding effort.
The chances of Lampert signing on for this action? Slim to none. Spending tons of money for a far-off and uncertain payback are not part of his hedge fund manager DNA.
Of course, Sears won't end up in bankruptcy like TWA did -- too much real estate for that. As Barrons's wrote back in October: Too, the retailer's real estate has considerable value that is not reflected in the stock. Add up this real estate, valuable brands like Kenmore and Craftsman, and Sears' huge appliance and home-remodeling business, and the company could have a liquidation value of more than $300 a share. The worse Sears performs in the next year or so, the more likely Lampert is to monetize and harvest this potential real-estate bonanza.
So maybe the failing turnaround is bullish. The sooner he gets tired of Sears, the sooner he'll cash out, and the sooner shareholder can reap that big return Barron's alludes to.











Reader Comments (Page 1 of 1)
1-28-2008 @ 10:02PM
John DiPasquale said...
I believe that Sears has quality products, their stores are excellently merchandised, and their staff is well trained. I believe the problem with Sears is that they have not invested in upgrading their systems to become more efficient. Their computer system in the stores is super slow and hardware in antiquated. They have caused confusion with their phone system that makes it difficult for customers to contact sales associates when they have a problem.
To many decisions on customer problems are handled at the Corporate level.
Concentration should be similar to Walmart purchasing efficiencies that result in rapid replenishment directly to stores, reducing cost.
Next day delivery on many products is non-existing.
I gladly pay the extra to shop at Sears.
Smaller warehouses that accomodate appliances and electronics only, would allow lower order and carrying cost.
Walmart stores in comparison, are dirty, poorly merchandised, and profitable. I attribute this to efficient systems that cut cost and attract customers purly on price.
If Mr. Lampert would invest in his own business, and with the demographics of his stores, could become price competitive and outsell Walmart.
11-19-2007 @ 10:33PM
ZOSO said...
Subject: Sears - Christmas shopping has already started
I know I needed this reminder since Sears isn't always my first choice. Amazing when you think of how long the war has lasted and they haven't withdrawn from their commitment. Could we each buy at least one thing at Sears this year?
How does Sears treat its employees who are called up for military duty? By law, they are required to hold their jobs open and available, but nothing more. Usually, people take a big pay cut and lose benefits as a result of being called up. < BR>
Sears is voluntarily paying the difference in salaries and maintaining all benefits, including medical insurance and bonus programs, for all called up reservist employees for up to two years.
I submit that Sears is an exemplary corporate citizen and should be recognized for its contribution. I suggest we all shop at Sears, and be sure to find a manager to tell them why we are there so the company gets the positive reinforcement it well deserves.
Pass it on.
Decided to check this before I sent it forward. So I sent the following e-mail to the Sears Customer Service Department:
I received this e-mail and I would like to know if it is true. If it is, the Internet may have just become one very good source of ad vertisement for your company. I know I would go out of my way to buy products from Sears instead of another store for a like item, even if it's cheaper at that store.
This is their answer to my e-mail:
Dear Customer:
Thank you for contacting Sears.The information is factual. We appreciate your positive feedback.
Sears regards service to our country as one of greatest sacrifices our young men and women can make. We are happy to do our part to lessen the burden they bear at this time.
Bill Thorn
Sears Customer Care
webcenter@sears.com
1-800-349-4358
Please pass this on to all your friends. Sears needs to be recognized for this outstanding contribution and we need to show them as Americans, we do appreciate what they are doing for our military!!!
It's Verified ! By Snopes.com at:
http://www.snopes.com/politics/military/sears.asp (shows the entire article)
12-03-2007 @ 11:06AM
Tom Bozlinski said...
I would agree that Sears should be congratulated for their excellent Corporate citizenship as it relates to our Reserve troops that may be called up. However, I can't condone a call to shop at Sears for that reason when they have totally abandoned their Customer base and created a management environment where nobody can resolve Customer problems.
My basement and garage look like a Sears Annex because of all the Craftsman tools and I bought a new central airconditioner from Sears a couple of years ago....but, sadly, no more. The central A/C has had to be totally rebuilt from scratch several times when it should have been replaced, but nobody is authorized to make that decision. In the meantime, I have had to spend about 4-5 weeks during the past couple of years without A/C and endured total incompetence from the service people in trying to correct the problem. Even when they knew what they had to do and the parts they would need, they failed to bring the right tools and parts to the repair appointment. Then, of course, the repair would need to get rescheduled for several days later, we would need to take more time off of work, and then we would have to pray that what they did would actually work. 3 out of 4 times it would not......and yet nobody could ever authorize replacing the unit in spite of a 10 year warranty that I was given.
My long standing relationship with Sears is dead as far as I am concerned and I am using whatever influence I have to avoid both Sears merchandise and investing in Sears since I don't see any future for them.