Another Sears Failure, A Chance To Sell It For Scrap

Eddie Lampert, the chairman and controlling shareholder of Sears Holdings (NASDAQ: SHLD), has been accused of being a fool and poor operator more than once. Sears results proved once more than the company cannot be turned around, even with its new CEO Lou D’Ambrosio, who must have been daft to take the job unless it was for a remarkably large amount of money.

Sears posted revenue of $9.71 billion for the last quarter. The retailer lost $1.39 a share. It made $.16 in the same period last year. Blame the weather, or the firm’s outdated stores, or perhaps even Costco (NASDAQ: COST) and Target (NYSE: TGT)

No matter who is to blame, the experiment which merged Sears with K-Mart is a failure, and shareholders are left to find an exit. The best one is probably to break the company apart again and sell off the pieces. WalMart (NYSE: WMT) may want some of the stores because they are located near cities where the world’s largest retailer is not. Target may also want to improve its geographic distribution without building stores and taking leases. Some poor retailer like JP Penney (NYSE: JPC) might even buy a few locations.

Sears has reached the point where Lampert cannot buy back shares to gladden his shareholders. He cannot bring in a new CEO. The cost to overhaul his 4,000 plus stores is too great. He can offer free shipping or greater discounts. But, he is trapped by the fire from Walmart, Target, Costco, and less powerful retailers. He should have given up years ago.  At least he might have the dignity to do it now.

Douglas A. McIntyre