SHLDQ - Sears Holdings Corp

[Vish_ram]

Lampert may very well be afflicted with "man with hammer" syndrome. He is tackling the issues of Shld from financial analyst point of view. He doesn't look at it as a traditional retailer. Sam Walton spent hours at his stores everyday understanding what customers wanted. CEO's of retail firms agonize over store layout, merchandising, marketing, value to customers etc

 

What does Lampert do? He cuts capex, store upgrades etc. every one of his decision is an analyst decision. What is his single retailer decision to bring in more customers to existing stores?

[muscleman]

Lampert may very well be afflicted with "man with hammer" syndrome. He is tackling the issues of Shld from financial analyst point of view. He doesn't look at it as a traditional retailer. Sam Walton spent hours at his stores everyday understanding what customers wanted. CEO's of retail firms agonize over store layout, merchandising, marketing, value to customers etc

 

What does Lampert do? He cuts capex, store upgrades etc. every one of his decision is an analyst decision. What is his single retailer decision to bring in more customers to existing stores?

 

Shop your way rewards?

[Parsad]

Lampert may very well be afflicted with "man with hammer" syndrome. He is tackling the issues of Shld from financial analyst point of view. He doesn't look at it as a traditional retailer. Sam Walton spent hours at his stores everyday understanding what customers wanted. CEO's of retail firms agonize over store layout, merchandising, marketing, value to customers etc

 

What does Lampert do? He cuts capex, store upgrades etc. every one of his decision is an analyst decision. What is his single retailer decision to bring in more customers to existing stores?

 

That's exactly it Vish...and the reason why they need to monetize the assets, because he is not a retailer and will never be a good retailer.  He also can't hire a great retailer, because he interferes too much and they would not last.  He's got to view the company as a hedge fund manager and nothing else.  Cheers!

[Sportgamma]

 

To boost “visibility and accountability,” Lampert explained in a letter to investors, he divided the company into more than 30 business units, including product-based divisions (apparel, tools, appliances), support functions (human resources, IT), brands (Kenmore appliances, Craftsman tools, DieHard batteries), and units focused on e-commerce and real estate. Under the new scheme, each business unit had its own president, chief marketing officer, board of directors, and, most important, its own profit-and-loss statement.

 

+

 

http://images.bwbx.io/cms/2013-07-10/feature_sears29__02__inline605.jpg

 

=

 

There can only be one conclusion. He´s liquidating and splitting the company up. Sears as it previously was does not exist any more and will not exist again. Therefore all questions regarding centralisation and decentralisation are simply irrelevant. There will be no turnaround. When the dust settles, the entity formerly known as Sears will be something totally different.

 

Just my $0.02

[BTShine]

WSJ piece today - http://online.wsj.com/article/SB10001424127887324263404578613751354714698.html?mod=WSJ_hps_LEFTTopStories#articleTabs%3Darticle

 

Does it seem like the media is slowly becoming more neutral (less negative) on Sears these days?  I'm wondering if the tide is slowly turning back towards neutral, and someday positive, territory?  The way I've sentiment, in general, is:

 

2003-2006: Neutral or Positive

2007-2013: Negative to Very Negative

2013-??? :  ???

 

Perceptions can change quickly. 

[Guest hellsten]

WSJ piece today - http://online.wsj.com/article/SB10001424127887324263404578613751354714698.html?mod=WSJ_hps_LEFTTopStories#articleTabs%3Darticle

 

In one of the more counterintuitive strategies in retailing today, Chairman and Chief Executive Edward Lampert has been pushing his beleaguered company to secure upscale offerings for the Marketplace section of its website, which features goods sold by third-party vendors.

 

I like the strategy. Very little physical assets are required to run a marketplace like overstock.com, sears.com and shopyourway.com compared to Sears and Kmart stores.

 

Also sounds a bit similar to what OSTK has been doing lately, i.e. increasing average order value and concentrating on third-party merchandise.

 

"Regardless of how successful they are in growing this business, the bulk of their business is from stores," Mr. McGinley said. "And if they can't plug those holes, it's hard to see how they remain viable as a retailer."

 

Judging by the capital expenditures at Sears they are not trying very hard to remain viable as a retailer, so why does Mr. McGinley sound disappointed? I agree with Sportgamma that the new Sears will not be the same as the old Sears.

 

Sears's Marketplace is now the third-largest online vendor market by number of visits, but it trails Amazon and eBay by a wide margin, according to comScore. In June, Amazon had 98 million unique visitors, eBay had 69 million and Sears had 18 million.

 

Impressive numbers from a CEO who doesn't understand retail or e-commerce  :P

[Guest wellmont]

WSJ piece today - http://online.wsj.com/article/SB10001424127887324263404578613751354714698.html?mod=WSJ_hps_LEFTTopStories#articleTabs%3Darticle

 

Does it seem like the media is slowly becoming more neutral (less negative) on Sears these days?  I'm wondering if the tide is slowly turning back towards neutral, and someday positive, territory?  The way I've sentiment, in general, is:

 

2003-2006: Neutral or Positive

2007-2013: Negative to Very Negative

2013-??? :  ???

 

Perceptions can change quickly.

 

it's not the article it's the reaction. the reaction on Twitter is "this is comical".

[texual]

I think the 'media' just tore ESL a new one last week in Bloomberg Businesweek...

 

They exposed him as a bad CEO, a horrible communicator, a daredevil investor and personally questioned his moral compass by illuminating his 38 million dollar mansion, as well as his antics using the pseudonym 'Eli Wexler,' so I would say no, this isn't a good time for ESL, Sears, his investors or anyone associated with him. I expect more people to leave Sears Holdings as always.

 

Even the positive news can't really overstate how personally this company is now tied to ESL and vice versa. Unless the man gets out there on TV, or does interviews (I wouldn't mind him going on Charlie Rose), the media will assume the worst.

 

I've met ESL and hes a good guy. He isn't one for the general lay public though, he isn't folksy or really eloquent and laughs on cue. I cannot imagine him ever being viewed positively by the media - they NEED interviews and they need material. If they constantly get rejected or turned down (as ESL has never done them), the media get a little tired. A little hurt, if you will. So they've taken anything that sounds juicy and magnified it. I doubt ESL is out to harm Sears Holdings or wants to see the company struggle and get sucked into all this negative press. He may just really not have a lot to tell anyone. Patience is a virtue in situations like these.

 

In a few years when things are better, you bet he may have more to say, but I suspect he will just keep his mouth shut and work to make money for shareholders.

[Guest hellsten]

See attached pictures for an idea of what the media (BusinessWeek) thinks of Lampert. First picture is from 2004. Second picture is from 2013.

 

The answer to headlines that ask "Is x the next y?", or ending with a question mark, is almost always no.

[BargainValueHunter]

http://g.fool.com/editorial/images/58766/sears-0001_large.jpg

 

http://beta.fool.com/johnnytrader23/2013/07/23/this-huge-department-store-is-about-to-say-goodbye/40834/?source=eogyholnk0000001

 

Sears still owns more than 750 properties, 10 distribution centers and has headquarters in Illinois, Michigan and Canada. These assets can be leveraged in many ways, including lease-backs, bringing safety to the balance sheet. Bishop Research and Analytics used five models to value Sears' real estate. When averaged, these models give an estimate value of $31.186 billion. If this number (which is more than 6 times the company's current market capitalization) is accurate, then it's hard to think of bankruptcy in the short run.

[Parsad]

See attached pictures for an idea of what the media (BusinessWeek) thinks of Lampert. First picture is from 2004. Second picture is from 2013.

 

 

That should tell you something as a contrarian.  Cheers!

[enoch01]

See attached pictures for an idea of what the media (BusinessWeek) thinks of Lampert. First picture is from 2004. Second picture is from 2013.

 

 

That should tell you something as a contrarian.  Cheers!

 

+1

 

I am getting excited about my Sears position.

[BTShine]

Personally, I think the low was in 2009 when Barron's ran the "Washed Out" article on Lampert and Sears.  The 2013 Businessweek photo looks like Rambo, and is kind of badass. 

 

The attached photo of Lampert drowning makes him looks worse than the photo from the 2013 BW article. 

[Guest hellsten]

The GoodHaven guys write about SHLD and Lampert in their latest semi-annual report:

Sears Holdings remains a problematic retailer with a huge asset base. We

admire current CEO and Chairman Eddie Lampert and believe he is as well-informed

as anyone in the retail industry. If you were to attend a shareholder meeting and

listen to Mr. Lampert (one of us has attended several), you would not think of a

highly successful hedge fund investor struggling to run a large company. Instead,

you would hear a CEO with a clear understanding of business economics, a

willingness to invest where there is a promise of adequate return, and a sensible

businessperson with the motivation that only a large equity stake tends to provide

(Mr. Lampert and entities affiliated with him appear to own more than 50% of the

outstanding shares of Sears Holdings, according to currentfilings).

 

Retail is changing dramatically. Amazon has proven the attraction to consumers

of an online shop with great service, and its success in rapidly growing its revenues

has impacted many retailers. In addition, behemoths like Walmart and Target have

been aggressive competitors in broad-lines retail. With this level of competition, we

recognize that fixing Sears or converting its assetsto more productive use is difficult.

Nevertheless, the company has spent heavily on technology and appears to be

making progress with its online business and its “Shop Your Way” member rewards

program.

 

We believe Searsis a company with extensive assets and significant promise, but

also ongoing risk of having itsstore traffic further usurped by the competition. Much

depends on management’s ability to transform its asset base to more productive use,

which takes time and the ability to successfully manage the retail franchise. Mr.

Lampert appears to have confidence, having bought shares personally not long ago

near $40 per share. Our investment case has been predicated on having limited risk

due to the asset base of the company and upside if these assets can be converted to

more profitable use, either inside or outside of the department store business. If our

investment falters, it will not be for lack of intelligent and motivated management,

but because the industry may have too many talented competitors to allow the kind of

progress from which superior returns are made.

 

http://www.goodhavenfunds.com/media/pdfs/GHF-Semiannual-f.pdf

[ERICOPOLY]

I sold my entire position on June 24th and bought it back today.  Same price!  Great tax loss.

 

[collegeinvestor]

Did you wait past 30 days to stay out of wash sale treatment.

 

Ericopoly i am curious about why you purchased SHLD. You always have concise analysis.

[ERICOPOLY]

Did you wait past 30 days to stay out of wash sale treatment.

 

Ericopoly i am curious about why you purchased SHLD. You always have concise analysis.

 

This is the 31st incremental day on the calendar after I sold.  No wash sale.

 

I have a muddy view on SHLD, not a concise one. 

[texual]

Why did you sell the shares and why did you just buy them back?

[ERICOPOLY]

Why did you sell the shares and why did you just buy them back?

 

I sold them for the tax losses in my taxable account.  Everything else had fallen a bit at the time.  BAC was getting back down near $12.  I bought a few extra BAC calls in my RothIRA to offset the SHLD on a notional basis, so that if everything else rallied back up again I wouldn't be completely out of luck while I wait for the 30 day wash sale period to expire.

 

Just lucky it worked out that SHLD didn't rebound with the rest of the market, and BAC did rally 20%.  So I sold the BAC calls and bought the SHLD again.  Just lucky I guess.

 

[BTShine]

Just lucky I guess.

 

Agreed, lucky.  Selling something one doesn't care to own for a tax loss is a fine idea.  But, if one actually wants to own the security (I have no idea whether Ericopoly truly wants to own SHLD), then selling in hopes that one can buy it back in a month at an advantageous price is a terrible idea. 

[krazeenyc]

Just lucky I guess.

 

Agreed, lucky.  Selling something one doesn't care to own for a tax loss is a fine idea.  But, if one actually wants to own the security (I have no idea whether Ericopoly truly wants to own SHLD), then selling in hopes that one can buy it back in a month at an advantageous price is a terrible idea.

 

I actually do this quite often -- not looking necessarily for a better price -- but simply to harvest the tax loss and get back into the position. Sometimes it works out -- sometimes not . But I always get to use the tax benefit against my gains.

[Mephistopheles]

Here are 9 recently announced store closures. I believe they were all announced in the last month or so. Nine in one month is a pretty good pace.:

 

http://www.tennessean.com/article/20130702/BUSINESS/307020061/Sears-store-CoolSprings-Galleria-close-undergo-redevelopment

http://www.kentucky.com/2013/07/01/2700452/sears-at-lexingtons-fayette-mall.html

http://wqad.com/2013/07/15/sears-to-close-store-at-southpark-mall/

http://www.clarionledger.com/article/20130711/BIZ/307110027/Sears-closing-store-Gautier

http://www.wfmj.com/story/22932176/sears-closing-austintown-parts-center

http://www.wenatcheeworld.com/news/2013/jul/10/sportsmans-warehouse-aims-for-east-wenatchee-sears-to-reopen-in-a-smaller-space-at-the-mall/

http://www.wlos.com/shared/news/features/top-stories/stories/wlos_south-asheville-kmart-set-close-12465.shtml

http://www.menafn.com/ed234a01-dd17-4400-874e-2889e8f21526/Kmart-closing-NE-Heights-store?src=main

http://www.lehighvalleylive.com/bethlehem/index.ssf/2013/07/kmart_to_close_in_bethlehem_to.html

 

[BTShine]

Mephistopheles,

 

Great point.  Nine in one month, or even a couple months, is a fast pace.  It seems to me, as stated or implied in SHLD's filings, that store closings are profitable and cash flow positive events.  A welcome occurrence in my eyes.

[Matson125]

I have been keeping track of this for a while and since the beginning of 2013 to last week I have over 50 store closures.  The majority of closures were due to the lease expiring.  They haven't put out a list like they did in 2011 with the 120 stores that they were closing.  Sears is doing everything they can to keep these quiet and not have a repeat of the last time they announced a closing list in 2011. 

[BTShine]

Two new solid videos for Kmart.  Not life saving, nor life changing for KMart.  But, I do like the vibe they're giving off with marketing nowadays. 

 

250,000 views in the first four days (released July 25th)

http://www.youtube.com/watch?v=aTpb37WY0eA

 

1,500,000 views on youtube in the last two weeks.

http://www.youtube.com/watch?v=9VxjfMKa9PE