Eddie Lambert has been a bust as a retailer. He may be fine at running a hedge fund, but due to his large holding in Sears (SHLD), that distinction may be shaky as well.
It is easy to blame the problems at Sears on the overall retail market. That is until Wall St. looks at Sears and the shares of rivals like Wal-Mart. Over the last year, WMT shares are fairly flat while Sears is off 50%.
Yesterday word leaked that Lampert would break Sears into several operating units. According to 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." The fate of the management of Sears and K-Mart stores is not known. It is also not clear why the units will not simply have powerful brand managers within the current structure similar to the Procter & Gamble (PG) system
It may be that Lampert wants autonomous units so that he can more easily sell them. But, none of the units is doing well enough to appear to warrant a premium.
Radical changes in management and operating structure at big companies often take several quarters to settle in. That make the Lampert move all the more bizarre. He is running out of time and anything that compromises making changes over the next few months is bound to do more damage to Sears.
Douglas A. McIntyre
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