Can Eddie Lampert save Sears?
The billionaire investor takes over the beleaguered chain after the abrupt departure of former CEO Lou D'Ambrosio.
Lampert, who has been arguing that Sears was on the verge of a turnaround since the administration of George W. Bush, will now have to match his words with deeds. That is not going to be easy.
The venerable retail chain continues to be vexed by an identity crisis. Wal-Mart (WMT), for instance, is known for its low prices. Target (TGT) is seen as a slightly more up-market alternative to Wal-Mart. What does Sears have to offer today's shopper? No none seems to know, and this confusion is reflected in the financial performance of the company.
Sales have declined for an eye-popping 23 straight quarters, which as Bloomberg News notes has eroded the company's cash position. D'Ambrosio, who had no retail experience when he joined the company last year, wasn't able to do much to stem the bleeding. He will remain with the firm through February.
The company has been forced to sell what it can to keep itself afloat. In October, it spun off its Sears Hometown and Outlet stores, which sells hardware, tools, home appliances, and garden equipment. It also spun off part of Sears Canada.
Shares of Sears have surged more than 47% over the past year as investors bet that Lampert would take the company private or improve the chain's financial performance enough to make it an attractive merger partner. The company's struggles, though, continue.
Sears said Monday that it expects to lose $280 million to $360 million, or $2.64 to $3.40 per share, in the current quarter. The net loss for the fiscal year will be between $721 million and $801 million. But excluding one-time costs and other items, profit would be $1.25 to $2 per share. Give the company credit for putting a positive spin on the situation.
Earnings before interest, taxes, depreciation and amortization should improve for the U.S. for four quarters straight, D'Ambrosio said in a statement, and the company had cut its net debt by $400 million at the end of 2012.
Whether that's good enough for Wall Street remains to be seen.
Jonathan Berr is long Target. Follow him on Twitter @jdberr.
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Sears used to be my favorite place to shop and that all changed after purchasing a high-end work bench that had a faulty power strip. All I asked for was a replacement $20 power strip for my new work bench and they told me "NO", and their manager told me the same thing. That was in 2004 and I have reluctantly been in there twice since then to have rachets replaced. This company will never get another dollar of mine :)
Going in a Sears is like going back in time they still have the same logo clothing here as they did where I grew up
it's like they are stuck in the past. I would get rid of of all these stiff shirts in each dept. trying to hustle you into buying something from them so they can get a little bonus. Their tools were good and warranted them and then in the 80s they would give you a rebuild kit for a ratchet that had went bad even though when you bought it the warranty said replacement the one thing I guess we all miss is the Sears catalogue before Christmas my children never knew that experience
No, it wasn't the Sears I grew up with. Mr. Lampert is and has done a terrible job. Sears has no vision other than the bottom-line, most of which ends up in Mr. Lampert's pocket. He'll end up riding it hard and putting it in the barn wet. And he'll squeeze every penny out of it without any re-investment in to. Good luck - it's won't be around and it's a shame to see how far it's fallen.
Depends what you are looking for, I agree with most posters that Sears is great for Appliances and Tools. The clothing sections don't do much for me nor do the home goods.
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