Back in June, there was a report on WalletPop that Sears (NASDAQ: SHLD) and Kmart spied on customers who participated in an online marketing study. The company paid participants in the study $10 if they would download and retain software for "My SHC Community."

The participants were told that the software would help them "participate in exciting, engaging, and on-going interactions" on their own terms. Sears noted that the software would only monitor the participants' online browsing. Not so, according to the Federal Trade Commission (FTC), which reported that the software captured secured sessions from participants -- including online banking. The FTC and Sears came to a settlement and the company was less than apologetic for its maneuver.

Not long ago, I found myself in Sears (NASDAQ: SHLD) buying a video game. While at the point of sale -- which was a nightmare, not because of anything related to the checkout process, but because a jerk cut in front of me and, after the completion of his transaction, proceeded to deluge the poor associate at the register with a bunch of random, techno nerd-talk that said associate clearly couldn't care any less about (but I digress) -- I noticed something pertaining to a Christmas Club card. Sounded interesting, but I didn't pay much attention to the selling material.

Well, last night I was checking out some articles at Brandweek.com, and lo and behold, I came across this one discussing the holiday card. You know how Christmas Clubs work at banks, correct? Same principle applies here. In a simple nutshell, you get the plastic, you store funds on it, and then you can access those funds later on in the season to acquire presents. It's basically like a gift card that you use for budgeting purposes. Not only is Sears involved in this, but so is Kmart. And there's a promotion going on that's mentioned in the article where you can earn a nominal amount of bonus money on it. I don't know the details; I would suggest checking with Sears/Kmart for further information.

Slumping sales did in Sears Holdings (NASDAQ: SHLD) in the second quarter, as the company posted a surprise loss of 17 cents per share (excluding items). The Street expected the company to report earnings of 38 cents per share. Why the staggering disparity?

One reason is that comparable-store sales dropped 8.6% (12.5% at Sears stores and 3.9% at Kmart). Another reason is what the company called "significant items," which include costs associated with store closings and severance (32 cents per share), domestic pension plan expenses (22 cents per share), mark-to-market losses on Sears Canada hedge transactions (8 cents per share), and a positive impact of a reversal of a $62-million reserve (29 cents per share). The store closings include charges that related to the decision to close 28 underperforming stores.

Last week we looked at expectations for some retail earnings. More shopping mall favorites are reporting second-quarter results this week, and analysts surveyed by Thomson Reuters are looking for significant earnings growth from some of them.

Aeropostale Inc. (NYSE: ARO), the teen-focused retailer spun off from Macy's (NYSE: M) in 1998, is expected to post a second-quarter profit that is 44.6% higher than a year ago, or $0.56 per share. Revenue for the quarter is expected to be 19.7% higher, or $451.3 million. For the full year, the forecast so far is for $2.98 per share (+25.8%) on $2.2 billion (+14.6%). Earnings of the New York-based company have matched estimates in recent quarters. The long-term EPS growth forecast is 13.9%, which is better than the retail industry average and rival Abercrombie & Fitch Co. (NYSE: ANF). Aeropostale's earnings multiple is 12x, and this debt-free company's cash flow from operations swung into positive territory in the first quarter. The First Call consensus recommendation is to buy ARO; The Motley Fool identified it as a Wall Street favorite. Shares are down a couple of bucks from the 52-week high of $38.74 back in July, but are still 123.0% higher year to date.

I guess Kmart -- part of Sears Holdings (NASDAQ: SHLD) -- has exhausted every other marketing idea it had for luring us back to the shopping aisles. How else to account for launching what must the earliest Christmas shopping campaign in history? The website for the chain now features a snowy village decked out in holiday cheer.

The banner reads "Take A Stroll Down Christmas Lane," and suggests that you can 'beat the Christmas rush" (ha!) by buying your stocking stuffers, gifts, and decorations now. Personally, I can't even predict who I'll still like well enough to give a gift to in six months. Stuff happens.

Voting continues in our Best & Worst in Money 2008 feature, and it looks like early favorites include falling gasoline prices, Wal-Mart, Joe the Plumber, and former New York Governor Eliot Spitzer. Did they get your vote?

Close races include the Breakout Person of the Year, in which vice presidential contender Sarah Palin and Olympic gold medal winner Michael Phelps duke it out for first place, while poor Neel Kashkari, who is in charge of the U.S. Treasury's financial relief funds, is in last place with only about 6% of the vote.

The Most Disturbing Consumer Trend is another close race, with plunging retirement accounts and falling home values virtually a tie. It's also a very close race between Wall Street and Kmart for Most in Need of a Makeover. Not much interest in making over Starbucks (NASDAQ: SBUX), however, as it has only about 4% of the vote in that category.

Lower fuel prices are clearly the most popular Silver Lining to the Recession with about 62% of the vote so far. Joe the Plumber, with 57% of the vote, has a clear lead over distant second place Rev. Jeremiah Wright as the Most Notable 15 Minutes of Fame. And disgraced New York Governor Eliot Spitzer leads the Biggest Fall from Grace category with about 56% of the vote.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

As we undertake a hasty exit from the tumult of 2008 and plunge headlong into the mysteries of 2009, we might find it interesting to consider some business entities that could benefit from a little "freshening up." Four familiar names; Kmart, Playboy, Starbucks, and Wall Street, are each in need of a timely makeover, to varying degrees. But if you could chose just one of these big name operations to fix up for 2009, which one would it be, and how would you fix it?

First let's consider Kmart, the adopted son of Sears Holdings Corp. (NASDAQ: SHLD). What are the changes that Kmart might need to remain competitive going into 2009? Should the company try playing the boutique angle, which failed to work for Wal-Mart Stores Inc (NYSE: WMT)? Should the company tighten up and consolidate, while pursuing a deeper product value play, or should it attempt to spread out its market coverage and work over its wholesale vendors, while engaging Wal-Mart in a game of cut-throat retail price points? If you were CEO of Kmart, what would you change?

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

There have been big hopes for all the nominees in this category at one time or another, but they've also suffered from questionable management moves of various sorts. So what's to root for in any of these companies?

Circuit City was founded in 1949; back then it was known as Wards Company. The big-box format and Circuit City name came as the result of a series of retail experiments, and became official in 1984. The company was listed on the New York Stock Exchange in the same year. In 1991, the company established a bank to operate its private-label credit card, and later offered a co-branded Visa. Big-box used car retailer CarMax (NYSE: KMX) was also owned by Circuit City at one point. In 2005, the company's board rejected a buyout offer; the company was worth a reported $1 billion then. The next year, Philip J. Schoonover became chairman, and ... well, the rest is history. Circuit City is now in Chapter 11.

Citigroup (NYSE: C) was formed in 1998 from one of the largest mergers in history: banking giant Citicorp and financial conglomerate Travelers Group. The company holds over 200 million customer accounts in more than 100 countries, and includes the investment services brands Smith Barney and Primerica. The company owns prominent, renowned buildings in Manhattan and Chicago, and also won naming rights to the new ball park of the New York Mets. But it was the subprime mortgage crisis that was Citigroup's undoing, resulting in the need for the recent federal bailout.

This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

When Kmart bought Sears to become Sears Holdings Corp (NASDAQ: SHLD) it seemed like a perfect match. Here were two retail titans of the 1970s who had completely missed the boat of modern big box retailers. Instead of trying to sell dowdy clothes, Sears could have concentrated on hardware and become Home Depot (NYSE: HD). Instead of selling dowdy everything with surly service, Kmart could have become Wal-Mart (NYSE: WMT).

Now what both stores need is a makeover. They need to become that bright, wide-aisle store that people love to shop at because they find neat things they didn't know they needed. Heck, if the Kmart in my neighborhood could just manage to keep its shelves stocked and not hire the surly, it would be a step up.

Both Kmart and Sears know they have trouble, but it just may be too late to make the changes. Kmart already went through bankruptcy and closed about 300 stores. They even came up with a bright, open store prototype with wide, well-lit aisles. But then they couldn't afford to really roll it out, says Shopping Centers Today. And many think they didn't close enough bad stores.

This past week, Sears Holdings Corp. (NASDAQ: SHLD) announced the addition of two new senior executives to replace the departing heads of its business segments. The former head of Motorola's (NYSE: MOT) mobile devices business, Stu Reed, will become senior vice president of Sears's home services unit. His predecessor was Mark Good. Former Procter & Gamble (NYSE: PG) senior executive Guenther Trieb will take charge of the Kenmore, Craftsman, and Diehard brands.

Hoffman Estates, Ill.-based Sears also announced the impending departure of Chief Marketing Officer Maureen McGuire. Senior vice president Richard Gerstein, also of the marketing team, will serve as chief marketing officer of Kmart and Sears.

Earlier this year Chairman Eddie Lampert split the company into five business units. But, the company reported in May its largest quarterly loss since the merger of Kmart and Sears in 2005. The company is scheduled to report second quarter results this week. Analysts surveyed by Thomson Financial on average expect a profit of 33 cents per share, up from a loss of 53 cents in the previous quarter, but still down from net income of $1.14 in the same quarter a year ago. Also, Sears has tended to offer negative surprises in the most recent quarterly reports. Analysts rate Sears as underperforming.

Shares closed Friday at $88.43, which is down 13.4% since the beginning of the year and down 38.4% from a year ago.

Welcome to the 68th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

This week, I'll be taking a look at the most recent financial results from Wal-Mart Stores Inc. (NYSE: WMT). The retailer continues to state the the federal tax economic stimulus checks being used by customers in its stores have buoyed it results.

Overall, this is good news. When the tax stimulus checks run out, though, will Wal-Mart continue to post such great sales figures like it did in June 2008? Remember June 2007?

Last summer, Wal-Mart also easily defeated analyst calls and toasted the expected same-store sales growth. Is seasonality more a part of the picture than tax checks? How about gas pricing stamping out multiple shopping trips by many families? All of this contributes, I would posit.

I like Eddie Lampert and I like those Sears stores. I like Craftsman tools and I (sort of) also like the Kmart part of Sears Holdings (NYSE: SHLD).

For those who might be confused as to what Eddie is doing with his potential company "break up," he's taking a distressed operation and laying it directly at the feet of the rubes who have screwed it up. It's a tactic that I myself would employ. Eddie Lampert is the somewhat silent watchful type, observant to a fault. He's a "big picture" thinker in the classic style. He plans and plots and weighs. Yeah, that's the ticket.

You see, Eddie "Golden Boy" Lampert isn't the kind of fellow who'll just blindly clear the decks of seasoned personnel in an effort to generate profit. If such were the case, we'd have seen way more of those pink slips flying long before now. I believe that by fracturing the company structure and by giving more divisional independence, he is now setting the stage for some timely and precise head-chopping down the road.

Eddie Lampert, worst CEO of 2007? Not in my book, not by a long shot. Yes, perhaps if you measure things strictly in growth dollars, Sears Holdings looks pretty ugly right now, but there's far more to the retail game than just rapid growth. Give the man some time to reveal his hand, one carefully picked card at a time. Besides, Eddie Lampert doesn't hold much regard for judgment by share price alone, and frankly my friends, neither do I.

Eddie Lampert is desperate. His Sears Holdings (NASDAQ: SHLD) will divide itself into several units to try to stop its hemorrhaging of customers. According to (subscription required) The Wall Street Journal, "the contemplated restructuring would create separate units to manage Sears's real-estate holdings and run brands such as Kenmore, Diehard, and Craftsman." How the stores-owned under brands like Kmart and Sears will be divided has not been disclosed.

Shares in Sears now trade at just above $89, down from a 52-week high of $195.18. The stock is down about 50% in the last year, while shares in rival Wal-Mart Stores (NYSE: WMT) are flat.

Why Lampert believes that moving his chess pieces around the table will work is anyone's guess. Pushing decisions about merchandise and brand marketing to divisions is no different than having "brand managers" under the current structure. Many successful companies, such as Procter & Gamble (NYSE: PG), are already run this way.

People don't want to shop at Sears and Kmart. The brands are dying.

Lampert is just grasping at straws.

Douglas A. McIntyre is an editor at 247wallst.com.

See also:
Zac Bissonnette's Lampert looks to shake things up at struggling Sears
Gary Sattler's Get off Eddie Lampert's back already, will ya?

So how does Eddie Lampert, chairman of Sears Holdings (NASDAQ: SHLD), with his stellar track record as a hedge fund manager, the man behind the 2005 merger of Sears Roebuck and Kmart merger -- how does he end up as a Money Loser of 2007?

Things looked bright at the beginning of the year as Lampert was hailed as the next Warren Buffett, and Sears Holdings was seen as developing in the mold of Berkshire Hathaway (NYSE: BRK.A). Lampert was a long-time favorite of Jim Cramer, who early in the year felt that Sears was a better investment than Wal-Mart (NYSE: WMT).

Investors and watchers waiting for the Lampert magic to happen were puzzled by his interest in Citigroup (NYSE:C), though that interest did benefit Citigroup at the time. But as Sears' first quarter results showed sales further slumping, investors grew impatient.

Even as Lampert called for $5 billion in cash in early summer, a visit to Sears stores showed an enterprise badly in need of a face-lift. Sears was lagging further behind other retailers, and the share price was sliding from a 52-week high in April. It grew increasingly clear that Lampert was neglecting the retail side of the business. Sears warned not to expect much in the second quarter.

According to the New York Times, "Kmart said yesterday that it would remove all jewelry advertised as 'lead free' from its shelves after workers at lead monitoring programs who tested the pieces found that some actually contained high concentrations of the metal."

One charm labeled lead-free was 52% lead. What is interesting here is that it raises questions about how much responsibility companies have about products that they source from third-party manufacturers.

Lululemon Athletica Inc. (NASDAQ: LULU) ended up embroiled in a minor scandal after a New York Times piece found that products the company was selling (the material in question was manufactured by a third party) -- labeled as containing seaweed -- actually contained no seaweed. While it sent the stock down as much as 9%, the share price ended up closing higher on the day of the story. Lululemon has since put out a press release refuting the New York Times claim, saying that its products actually do contain what they say they contain.

The legal issues could be murky. But these companies know that consumers aren't going to want to shop at stores in which products are labeled in a misleading way, and so they're taking steps to evaluate manufacturers' claims -- before the New York Times does.