SHLDQ - Sears Holdings Corp

[Matson125]

How Sears Got Into the Data-Services Game

 

http://adage.com/article/dataworks/sears-data-services-game/240635/

[muscleman]

How Sears Got Into the Data-Services Game

 

http://adage.com/article/dataworks/sears-data-services-game/240635/

 

This is interesting. If they want to get this done nicely, shouldn't they get more aggressive and hire more folks from Google/MSFT/Amazon?

[drewdalton]

This is interesting. If they want to get this done nicely, shouldn't they get more aggressive and hire more folks from Google/MSFT/Amazon?

 

Sears is getting more aggressive in its hiring of military veterans.

 

http://it-jobs.fins.com/Articles/SBB0001424052702304870304577490710601969318/Sears-Holdings-on-Track-to-Hire-3-500-Vets

[muscleman]

This is interesting. If they want to get this done nicely, shouldn't they get more aggressive and hire more folks from Google/MSFT/Amazon?

 

Sears is getting more aggressive in its hiring of military veterans.

 

http://it-jobs.fins.com/Articles/SBB0001424052702304870304577490710601969318/Sears-Holdings-on-Track-to-Hire-3-500-Vets

 

I don't know if Eddie understands how software development works, where one superstar engineer can contribute 10x more than 5 solid engineers. He really needs to understand that and start hiring aggressively the talents from the tech companies.

Or he could just make SHLD a client of Google/AMZN's cloud service for data management instead of reinventing the wheel.

[MYDemaray]

Great new K-Mart ad: https://www.youtube.com/watch?feature=player_embedded&v=I03UmJbK0lA

[Kraven]

Great new K-Mart ad: https://www.youtube.com/watch?feature=player_embedded&v=I03UmJbK0lA

 

Thanks for posting.  Very funny!

[Matson125]

I had posted on this back in January, but when I was doing some research this caught my eye:

http://www.twincities.com/business/ci_22310974/st-paul-sears-site-eyed-redevelopment-homes-offices

 

"Sears has identified about 10 sites across the country that they believe are ripe for redevelopment, and this is one of them. And when I say redevelopment, they mean keeping the store."

 

http://www.enewspf.com/latest-news/school-news/42007-roosevelt-students-win-2013-eisenberg-foundation-midwest-real-estate-challenge.html

"This year’s site was proposed by the Sears Holdings Corporation around the existing Sears store at 62nd street which would anchor redevelopment on a total of nearly 38 acres in total.  Sears is proposing similar innovative redevelopment in other urban locations in the U.S. with one of the first being in St. Paul."

 

[CorpRaider]

I had posted on this back in January, but when I was doing some research this caught my eye:

http://www.twincities.com/business/ci_22310974/st-paul-sears-site-eyed-redevelopment-homes-offices

 

"Sears has identified about 10 sites across the country that they believe are ripe for redevelopment, and this is one of them. And when I say redevelopment, they mean keeping the store."

 

http://www.enewspf.com/latest-news/school-news/42007-roosevelt-students-win-2013-eisenberg-foundation-midwest-real-estate-challenge.html

"This year’s site was proposed by the Sears Holdings Corporation around the existing Sears store at 62nd street which would anchor redevelopment on a total of nearly 38 acres in total.  Sears is proposing similar innovative redevelopment in other urban locations in the U.S. with one of the first being in St. Paul."

 

They did one where I live.  The sears was remodeled but it was ginormous and about half the SF are now filled with a Whole Foods.  I bet that asset is now worth a bit more than BV.

[biaggio]

I had posted on this back in January, but when I was doing some research this caught my eye:

http://www.twincities.com/business/ci_22310974/st-paul-sears-site-eyed-redevelopment-homes-offices

 

"Sears has identified about 10 sites across the country that they believe are ripe for redevelopment, and this is one of them. And when I say redevelopment, they mean keeping the store."

 

http://www.enewspf.com/latest-news/school-news/42007-roosevelt-students-win-2013-eisenberg-foundation-midwest-real-estate-challenge.html

"This year’s site was proposed by the Sears Holdings Corporation around the existing Sears store at 62nd street which would anchor redevelopment on a total of nearly 38 acres in total.  Sears is proposing similar innovative redevelopment in other urban locations in the U.S. with one of the first being in St. Paul."

 

They did one where I live.  The sears was remodeled but it was ginormous and about half the SF are now filled with a Whole Foods.  I bet that asset is now worth a bit more than BV.

 

Thanks for posting and update.

 

I could not get that link to work, kept crashing me.

 

Are there any pictures elsewhere? Or other details? Was the surrounding area pretty nice? Do you recall how long it took to re develop

 

I can see them turning some crappy locations into something more upscale if they can attract some upscale tenants like whole foods.

 

Interesting, maybe I won t sell my SHLD. Maybe a price less than $50 we should add

[txlaw]

I had posted on this back in January, but when I was doing some research this caught my eye:

http://www.twincities.com/business/ci_22310974/st-paul-sears-site-eyed-redevelopment-homes-offices

 

"Sears has identified about 10 sites across the country that they believe are ripe for redevelopment, and this is one of them. And when I say redevelopment, they mean keeping the store."

 

http://www.enewspf.com/latest-news/school-news/42007-roosevelt-students-win-2013-eisenberg-foundation-midwest-real-estate-challenge.html

"This year’s site was proposed by the Sears Holdings Corporation around the existing Sears store at 62nd street which would anchor redevelopment on a total of nearly 38 acres in total.  Sears is proposing similar innovative redevelopment in other urban locations in the U.S. with one of the first being in St. Paul."

 

I pointed this out to someone at the FFH AGM this week.  Biaggio, was that you?

 

In any case, this is one more thing for folks to think about re: SHLD real estate and whether they should have liquidated it quickly.  These urban sites are very, very interesting.  Fits very well with the long term trend for the hip young people (like me -- sort of ;D) to move into the urban core. 

[compoundinglife]

I had posted on this back in January, but when I was doing some research this caught my eye:

http://www.twincities.com/business/ci_22310974/st-paul-sears-site-eyed-redevelopment-homes-offices

 

"Sears has identified about 10 sites across the country that they believe are ripe for redevelopment, and this is one of them. And when I say redevelopment, they mean keeping the store."

 

http://www.enewspf.com/latest-news/school-news/42007-roosevelt-students-win-2013-eisenberg-foundation-midwest-real-estate-challenge.html

"This year’s site was proposed by the Sears Holdings Corporation around the existing Sears store at 62nd street which would anchor redevelopment on a total of nearly 38 acres in total.  Sears is proposing similar innovative redevelopment in other urban locations in the U.S. with one of the first being in St. Paul."

 

I pointed this out to someone at the FFH AGM this week.  Biaggio, was that you?

 

In any case, this is one more thing for folks to think about re: SHLD real estate and whether they should have liquidated it quickly.  These urban sites are very, very interesting.  Fits very well with the long term trend for the hip young people (like me -- sort of ;D) to move into the urban core.

 

Man I really should of tried to meet up with more of the board members while I was at the dinner and meeting. Didn't realize how many of you were there. Next Year!

 

I am right there with you, ESL has a very long term view of what SHLD is capable of returning and we constantly see little tid bits of that. Let the haters hate and we can check back in 10 years.

[compoundinglife]

BTW, did anyone visit the Sear's Canada store downtown at the Eaton Center? That store is much nicer than the stores I have visited in the US. Feels much more upscale. They had large area for men's suits and carried some decent brands like Kenneth Cole.

[biaggio]

"I pointed this out to someone at the FFH AGM this week.  Biaggio, was that you?''

 

not me, Txlaw

 

i still have a very small position-

 

will have to look at my notes, re evaluate my position

 

over time i think hopefully there will be some disclosure as to how these projects are doing  and there may be time to add

[texual]

But the consensus was, these redev properties are numbered at about ten? Ten is not enough to move any dial, and takes years. I would step back from this because on the end Sears is a middle class store, aiming to improve its earnings per share by two ways: buy back shares and an uptick in appliance sales.

 

Those two facts really are the catalyst for Sears, the rest is icing on the cake. Some time ago Bruce said Sears was easily capable of earning ten dollars a share for owners. Back then the share count was higher and he said that number only grows, while the stock price basically oscillates between 70 and 40. So time it well, and you get to own a stock with a cost average of 50, if your lucky, 40,... that can earn EPS of 10. Over the coming years if they go below 80 million shares outstanding, ownership will be squeezed thin and trade lightly - you do the math.

 

I saw on twitter someone mentioned that appliance age in 2007 was 5 years old, and in 2012 the average age of appliances in homes were somewhere around 8. That is severely above the normal and so this next generation of smart appliances smack into the real trend, which is people will replace those appliances, and housing will improve and new home formation requires appliances. I am proud to own a small share of the #1 appliance retailer.

 

More anecdotally I spend a lot of time in Lowes and HD and Best Buy and this past two years those appliance sections are growing, someone obviously senses a opportunity here. But even with competition Sears offers way more service and selection for appliances. You can't beat that combination. So when ESL decides to spend money on store upkeep, I would back away. The way I see this playing out is the stores will get back to profitability and start kicking ass when those EPS numbers grow with appliance sales. The softlines are important but not in any cyclical sense, I am invested in Sears for its appliance business first, then the other stuff becomes important after.

[texual]

And for the record I have never wasted time assuming this was a real estate investment. It is a small, but important aspect of the big picture but I could never value it (too much of an investment of my time) while I believe the analysis is sound, I doubt ESL wants to sell real estate as his primary business. The big trend is appliance sales and building a presence online. After all the dust settles he could go sell property, but his job is hard enough just navigating the next few years.

[compoundinglife]

Some PRs out of SHLD and Ace Hardware recently:

 

"Sears Holdings Establishes New Business Unit Focused on Entertainment-Driven Fashion Brands"

 

http://www.prnewswire.com/news-releases-test/sears-holdings-establishes-new-business-unit-focused-on-entertainment-driven-fashion-brands-202337361.html

 

"Craftsman® Tools Now Available at More Than 2,000 Ace Hardware Stores Nationwide"

 

http://online.wsj.com/article/PR-CO-20130416-909134.html?mod=googlenews_wsj

 

[ItsAValueTrap]

BTW, did anyone visit the Sear's Canada store downtown at the Eaton Center? That store is much nicer than the stores I have visited in the US. Feels much more upscale. They had large area for men's suits and carried some decent brands like Kenneth Cole.

I always thought that store was kind of nasty compared to everything else in the Eaton Center. 

 

Traffic is ok but not as good compared to everything else in that building.

It isn't as well-lit as other retailers.  But it is better than bottom-tier retailers (e.g. many independently-owned convenience stores).

On the promotional front, Sears may not be as good at playing the "coupon crack" game as other retailers.  They don't seem to have good promotions that draw people in.

On the cosmetics front, Sephora is #1 at what they do and they are clearly doing things better than Sears.  Customers seem to prefer the model where the salesperson isn't trying to push a particular brand's cosmetics (in a Sears, there are stands for each brand).

 

Overall, they aren't the best and they aren't the worse.

[compoundinglife]

BTW, did anyone visit the Sear's Canada store downtown at the Eaton Center? That store is much nicer than the stores I have visited in the US. Feels much more upscale. They had large area for men's suits and carried some decent brands like Kenneth Cole.

I always thought that store was kind of nasty compared to everything else in the Eaton Center. 

 

Traffic is ok but not as good compared to everything else in that building.

It isn't as well-lit as other retailers.  But it is better than bottom-tier retailers (e.g. many independently-owned convenience stores).

On the promotional front, Sears may not be as good at playing the "coupon crack" game as other retailers.  They don't seem to have good promotions that draw people in.

On the cosmetics front, Sephora is #1 at what they do and they are clearly doing things better than Sears.  Customers seem to prefer the model where the salesperson isn't trying to push a particular brand's cosmetics (in a Sears, there are stands for each brand).

 

Overall, they aren't the best and they aren't the worse.

 

Yes most of the stores in that mall are much nicer. In comparison to most of the US Sears stores I have visited there was a higher caliber of merchandise and the store interior had a better feel to it.

[txlaw]

Press release on Fulfilled by Sears offerings:

 

http://online.wsj.com/article/PR-CO-20130417-909334.html

[muscleman]

Press release on Fulfilled by Sears offerings:

 

http://online.wsj.com/article/PR-CO-20130417-909334.html

 

This is nice!

[biaggio]

Press release on Fulfilled by Sears offerings:

 

http://online.wsj.com/article/PR-CO-20130417-909334.html

 

This is nice!

 

Thanks for posting.

 

Looks like they are throwing another low cost idea on the wall to see if sticks.

 

I wish they would try to use a new name with their ideas i.e. don t use Kmart or Sears in there press releases/marketing efforts. I think some people will automatically be turned off once they see the names Sears or Kmart.

 

If it is truly good cost, might be a good value for small merchants- like an ebay with added advantage of low cost storage & distribution all over North America . Good for SHLD as they can utilize capacity in warehouses, distribution, retail stores etc. 

 

Good that they are trying to re invent themselves rather then taking on the market leaders head on.

 

Maybe wishful thinking.

 

Surprised that release says that 65% of Sears transactions are online. This might mean that they don t have much sales in their bricks and mortar which would not be a surprise I guess.

[Guest hellsten]

Horizon Kinetic on SHLD in the Q1 2013 commentary that Gio posted in http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/horizon-kinetic-q1-2013-commentary/msg112901/:

In 2011, Sears recorded a $1.8 billion non-cash charge to write down its deferred tax assets. This was necessitated by an accounting rule test requiring that a valuation reserve be established when income has not been generated over a three-year cumulative period to support the deferred tax asset. However, the company stated in its just- released 2012 annual report that it believes that no economic loss has occurred. If the company is correct, then those net operating losses and tax benefits remain available to reduce future taxes on future income. So, as of 2012, Sears still had $679 million of deferred tax assets on its balance sheet and what it believes should be an additional $1.8 billion. Future after-tax income, then, could be far higher than would otherwise be anticipated. The company’s book value, now $3.2 billion, as against a stock market capitalization of $5.3 billion, would actually be $5 billion if the write-down of the tax asset were reversed. The Sears book value discussion has some additional interesting complexities, so we’ll call this adjusted $5 billion book value an “all else equal” figure.

…

It also recorded a gain of $163 million for the surrender and early termination of the leases on three properties operated by Sears Canada; proceeds were $170 million.

…

In comparing the amount of gain with the total proceeds, which were only marginally greater, one might reflect on what the stated book value of Sears really means. One might also reflect on the value of some of the Sears stores that it doesn’t own, but merely leases, if those are long-term leases. Finally, one might reflect on the aggregate gains figure of $468 million on these 14 properties in the context of the 2,109 full-line stores that the company operates.

[mevsemt]

Horizon's commentary on the real estate was interesting, but it's nothing that hasn't been said before. 

 

On a related note, I think it's worth taking a closer look at Eddie's annual letter, specifically under the "Creating Long-Term Value" subheading.  Instead of talking about real estate, brands, Land's End, etc. in broad terms, he basically focuses on one very specific thing - store closings.  When i first read the letter, my reaction was basically "meh, that's interesting, but all these store closings have already happened, so why go into so much detail about it?"

 

But now I'm wondering if the discussion was meant as a precursor to another round of store closings in the near future?  For anyone who's looked at Kmart's exit from bankruptcy up through its acquisition/merger with Sears, you know there's significant value to be unlocked by "downsizing".  Anyway, it would certainly make things interesting...

 

mevsemt.blogspot.com

[txlaw]

I wish they would try to use a new name with their ideas i.e. don t use Kmart or Sears in there press releases/marketing efforts. I think some people will automatically be turned off once they see the names Sears or Kmart.

 

If it is truly good cost, might be a good value for small merchants- like an ebay with added advantage of low cost storage & distribution all over North America . Good for SHLD as they can utilize capacity in warehouses, distribution, retail stores etc. 

 

I think as long as they use Sears and not Kmart, they'll be okay.  Heck, if they do a good job, we could see a revitalization of the "Sears" name. 

 

But we'll see how it goes.

[JEast]

I understand the rhetoric, value adding process, potential value, and agree with it.  However, at the end of the day the numbers are what they are.  Even adding back tax allowances and potential sales of real estate down the road at higher prices, the stock is not at an extremely cheap price for investment.  Of course, if good news comes out over the next 6-18 months the stock may double but surely not an investment with a great deal of margin-of-safety on the balance sheet.

 

There appears currently to be cheaper opportunities out there with BAC and RFP to name a couple.

 

Cheers

JEast