Lampert, the Man Who Ruined Sears, Takes Over
Jan 8th 2013 6:30AM
Updated Jan 8th 2013 8:40AM
The man who created Sears Holdings Corp. (NASDAQ: SHLD) in 2005, largely through the combination of Sears and Kmart, and then ruined the new public company, will take over as CEO of the firm he controls. Eddie Lampert will run Sears Holdings day-to-day. The company announced:
Louis J. D'Ambrosio will step down as Chief Executive Officer for family health matters at the end of the company's fiscal year on February 2, 2013. Edward S. Lampert will then assume the role of CEO of Sears Holdings, in addition to his role as Chairman of the Board of Directors. Mr. D'Ambrosio will remain on the Board until the company's next Annual Meeting of Stockholders to be held in May 2013 and will be available to assist with a smooth transition.
The reason for D'Ambrosio's departure may be accurate, but in a job in which he essentially served at Lampert's whim, he had no success. He gets to participate in a transition that cannot be smooth. Sears, and its operating divisions, are as badly off as they have been since Lampert created the firm. Sears announced at the same time it released the CEO information that for the nine weeks that ended December 29:
Total domestic comparable store sales for the nine-week period declined 1.8% largely due to sales declines in the consumer electronics category at both Sears and Kmart. Excluding the consumer electronics category, total comparable stores sales decreased 0.2%, with Sears Domestic increasing 2.4% and Kmart decreasing 2.4%.
Since Amazon.com Inc. (NASDAQ: AMZN) continues to wreck the consumer electronics business for all bricks-and-mortar retailers, Sears and Kmart will not make comebacks in the sector. The overall same-store sales data have been down most quarters since Sears Holdings was created.
The most concrete proof of Sears failings is the reaction of investors. Over the past five years, the stock is off nearly 60%. Shares of rivals Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) have both handily outperformed the S&P 500. Walmart's shares are up about 50% over the five-year period.
Lampert is down to a very few options for Sears, none of which he has shown any taste for. One is to close hundreds of underperforming stores to create a smaller, but probably more financially stable corporation. The other is to sell off what he can in terms of stores, real estate and inventory. At this point, running the company as a large, national retailer cannot work. Years of history prove it.
Filed under: 24/7 Wall St. Wire, Earnings, Retail Tagged: AMZN, featured, SHLD, TGT, WMT