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As BloggingStocks' Brent Archer indicated a few days ago, Sears Holdings Corp. (NYSE: SHLD) announced a rather large $1.5 billion share buyback in the face of declining quarterly sales and profits. These figures came as no surprise to the retail pundits keeping an eye on Sears and Kmart same-store comps and details. So, why is Sears buying back ... now?

It's a standard procedure for Sears Holdings Chairman and top investor Eddie Lampert, who was hailed as the next Warren Buffet a few years ago after orchestrating the merger between retail laggard Sears and bankrupt-prone Kmart. Yes, there were more than just retail assets in that decision (like real estate holdings), but the retail side, despite many promises from Lampert, has still not shown any real threat to competitors like Kohl's Stores, Inc. (NYSE: KSS), Target Corp. (NYSE: TGT), Wal-Mart Stores, Inc. (NYSE: WMT) and Macy's Inc. (NYSE: M).

Sales at Sears Holdings have slid, its stock has lost almost 33% of its market value since peaking earlier this year, and its cash pile is dwindling. Solidifying market value with buybacks is not exactly new, and it's an oft-ran strategy for Lampert. Is it a sign of desperation or simply a timed event? Is Lampert even in tune with the retail side of the business he now chairs or is he just trying to maximize his investment? The smart money says the second choice is the correct one, and I'd be surprised if Lampert gives a rat's behind about any focus on improving the retail operations of either Sears or Kmart. But, the next Warren Buffett? Meh.

Why is Sears (SHLD) repurchasing stock -- now? originally appeared on BloggingStocks on Wed, 15 Aug 2007 14:00:00 EST. Please see our terms for use of feeds.

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