SHLDQ - Sears Holdings Corp

[jeffmori7]

Check out the SHOS quarter.  Ugly as sin.

 

http://www.sec.gov/Archives/edgar/data/1548309/000154830914000020/exhibit991fiscal2014-q1.htm

 

Yup, they are blaming bad weather again, but there will be a time when they cannot use this excuse... At least they are still making a tiny profit. I hope to see the fees from new franchisees go up.

[Aberhound]

Anyone who is competent enough to take the job and execute a retail turnaround also is probably wise enough not to work for Lampert at a price Lampert would be willing to pay.

 

You never know.  Many All-Star CEO's are already rich and choose to work because they enjoy the challenge and feeling of success.

 

Chainsaw Al (Coleman) would likely accept the job. If he were hired or someone of his like I would buy the stock again. Right now I expect $10 more than I expect $70. I am considering an over/under option strategy as the problem is fixable. I have never done such a strategy so I am only thinking so far.

[20ppy]

Lampert and Mulally meet...

http://www.chicagotribune.com/classified/automotive/sns-rt-us-sears-holdings-ceo-mulally-exclusive-20140605,0,6547301.story

 

Just speculation, but here's an interesting quote from Mulally this morning on CNBC when asked if he is going to work at Sears (paraphrased) "I have loved serving 2 American icons in Boeing and Ford.  When I retire I'm really going to think about where I serve next."

 

Only one thing to really conclude: Lampert needs help because he has no clue what he is doing?

 

At Ford, Mulally proved himself to be a master of branding.  This is an area Lampert needs to work on if he's serious about a retail turnaround.  KMart, Sears, SYW, Kenmore, Craftsman, Diehard, Lands' End--your average consumer isn't going to sense the threads holding all of this together.  It really starts to feel like a messy web, and all of the brands get polluted ('the flies don't get trapped' if you'd like to keep the web metaphor going).

 

Or like Warren, Eddie interacts with and learns from the best.

[20ppy]

Anyone who is competent enough to take the job and execute a retail turnaround also is probably wise enough not to work for Lampert at a price Lampert would be willing to pay.

 

You never know.  Many All-Star CEO's are already rich and choose to work because they enjoy the challenge and feeling of success.

 

Chainsaw Al (Coleman) would likely accept the job. If he were hired or someone of his like I would buy the stock again. Right now I expect $10 more than I expect $70. I am considering an over/under option strategy as the problem is fixable. I have never done such a strategy so I am only thinking so far.

 

I'd rather prefer Eddie to anyone else for Sears CEO at least before Sears turns around.

[heth247]

This is a good and (relatively) short read on omni channel retail:

 

Omni-Channel, Its definition, Theory and Practice

http://www.retail-maven.com/omni-channel.html

 

Unfortunately, Sears' name does not even make into the author's list of omni channel retailers. The author also stated that:

 

"The prime reason for a retailer to adopt Omni-Channel is to sell merchandise."

"Omni-Channel is an enhancement for business not a cure for business ills."

 

which are apparently different view from Eddie's.  We have yet to see how Eddie made him differentiated from others.

 

[peridotcapital]

First a meeting with Mulally and now a Groupon promotion:

 

http://www.groupon.com/deals/sears-14?tsToken=US_AFF_0_200009_200093_0&utm_campaign=200009&utm_source=GPN&utm_medium=afl

 

These are not things you do if things are really showing incremental improvement.

[Luke 532]

First a meeting with Mulally and now a Groupon promotion:

 

http://www.groupon.com/deals/sears-14?tsToken=US_AFF_0_200009_200093_0&utm_campaign=200009&utm_source=GPN&utm_medium=afl

 

These are not things you do if things are really showing incremental improvement.

 

Groupon is a partner of ShopYourWay:

 

And meeting with a successful business person is a sign that things aren't working?  Not necessarily.

[peridotcapital]

First a meeting with Mulally and now a Groupon promotion:

 

http://www.groupon.com/deals/sears-14?tsToken=US_AFF_0_200009_200093_0&utm_campaign=200009&utm_source=GPN&utm_medium=afl

 

These are not things you do if things are really showing incremental improvement.

 

Groupon is a partner of ShopYourWay:

 

And meeting with a successful business person is a sign that things aren't working?  Not necessarily.

 

They are using a Groupon deal to clear out certain categories of merchandise that must be selling terribly. I have been getting Groupon emails for years and have never seen a national Sears campaign. This does not appear to have anything to do with SYW. In fact, SYW is not even mentioned once in the promotion.

 

I don't think you meet with successful business people to get turnaround advice if your turnaround is working. It does not show confidence that the BS we are being fed (the financials are ugly but the underlying business metrics are improving) is actually correct. The 50% off Groupon deal (yet another way to cheapen your brand and condition people to expect big discounts at your stores) just confirms this.

[Luke 532]

I don't think you meet with successful business people to get turnaround advice if your turnaround is working.

 

 

(1) Do we even know that was the focus of the conversation?  It most likely was at least to some degree, but when you have two anonymous sources with very different viewpoints (one said Lampert is seeking Mulally as CEO, the other says he was seeking turnaround advice) it is very difficult to decipher the details of the meeting.  And do the sources understand the difference between turnaround and transformation?

 

(2) Why in the world would you not leverage your business contacts to make your transformation better?  Perhaps Lampert feels he's close to the point of a successful transformation and wants to get another viewpoint on the best actions to take going forward.  Successful people always meet with other successful people.  The best students in most MBA programs are usually those that stay after for extra help.  Do they need the help?  No.  Do they want it?  Yes.  The best athletes often train in the off-season with the other greats of their game. So on and so forth.

 

(3) Why in the world would Mulally waste his time to meet with a dying retailer that had zero chance of surviving and is flailing, all the while run by some idiot?  As one of the most respected turnaround guys of his generation, if anything I was encouraged he would take the time to meet with Lampert.  You don't do that unless you have at least an inkling of interest.  Especially when he left the door open when asked directly if he was going to Sears: (paraphrased) "I have loved serving 2 American icons in Boeing and Ford.  When I graduate (retire) I'm really going to think about where I serve next."  Clearly he is interested in working somewhere, and clearly his past has indicated he likes to help iconic companies. 

 

(4) You might be entirely correct.  The market certainly agrees with you.  I'm just offering another plausible explanation.

[merkhet]

Groupon deals are incorporated as part of the SYW app. Basically, Groupon has space within the SYW app to broadcast their non-Sears Groupon deals. It makes sense that Sears would pay for this by advertising on Groupon as well.

[Luke 532]

 

(3) Why in the world would Mulally waste his time to meet with a dying retailer that had zero chance of surviving and is flailing, all the while run by some idiot?  As one of the most respected turnaround guys of his generation, if anything I was encouraged he would take the time to meet with Lampert.  You don't do that unless you have at least an inkling of interest.  Especially when he left the door open when asked directly if he was going to Sears: (paraphrased) "I have loved serving 2 American icons in Boeing and Ford.  When I graduate (retire) I'm really going to think about where I serve next."  Clearly he is interested in working somewhere, and clearly his past has indicated he likes to help iconic companies. 

 

It would be interesting if we knew which companies/BOD's Mulally has met with this year (Microsoft has been mentioned repeatedly by MSM as having interest in Mulally).

[BTShine]

1) Lampert met with Buffett for advice early on in his career.  He had great investment success following that meeting.  How should we spin that? 

 

2) $20 for $10 is just a deal.  It's a loss leader.  I'm not sure if it's a net positive or a negative for Sears.  Only 100+ people (of the millions that shop Sears) have bought the Groupon.  I'm not sure it's significant or meaningful.

 

If they were offering groupons of $100 for $50, or $500 for $250 then I'd be worried.  That's liquidation type...but $10 for $20 is just a loss leader to get shoppers in the store. 

[fareastwarriors]

First a meeting with Mulally and now a Groupon promotion:

 

http://www.groupon.com/deals/sears-14?tsToken=US_AFF_0_200009_200093_0&utm_campaign=200009&utm_source=GPN&utm_medium=afl

 

These are not things you do if things are really showing incremental improvement.

 

 

Cool, thanks. I'm going to purchase one.

[sampr01]

Hi Peridotcapital

 

Macy's, Toysrus, Target, and Wholefoods sold their giftcards via Groupon with 50% off. I hope those companies not liquidating ;)

 

First a meeting with Mulally and now a Groupon promotion:

 

http://www.groupon.com/deals/sears-14?tsToken=US_AFF_0_200009_200093_0&utm_campaign=200009&utm_source=GPN&utm_medium=afl

 

These are not things you do if things are really showing incremental improvement.

[adesigar]

First a meeting with Mulally and now a Groupon promotion:

 

http://www.groupon.com/deals/sears-14?tsToken=US_AFF_0_200009_200093_0&utm_campaign=200009&utm_source=GPN&utm_medium=afl

 

These are not things you do if things are really showing incremental improvement.

 

Groupon is a partner of ShopYourWay:

 

And meeting with a successful business person is a sign that things aren't working?  Not necessarily.

 

They are using a Groupon deal to clear out certain categories of merchandise that must be selling terribly. I have been getting Groupon emails for years and have never seen a national Sears campaign. This does not appear to have anything to do with SYW. In fact, SYW is not even mentioned once in the promotion.

 

I don't think you meet with successful business people to get turnaround advice if your turnaround is working. It does not show confidence that the BS we are being fed (the financials are ugly but the underlying business metrics are improving) is actually correct. The 50% off Groupon deal (yet another way to cheapen your brand and condition people to expect big discounts at your stores) just confirms this.

 

 

1. The $10 off $20 is a non event. Lots of companies sell/promote through Groupon. Its just targeting a different audience.

 

Walmart on Groupon http://www.groupon.com/deals/walmart-stores-inc

Target on Groupon http://www.groupon.com/deals/target

Macys on Groupon http://www.groupon.com/deals/macys

 

2. Lampert met Mullaly is also a non event unless they confirm the reason/details of the meeting.

The smartest people are always learning and open to input from any good source. Why wouldn't Lampert want to talk to and learn from Mullaly?

They could have been discussing the Florida weather, fishing, Golf  or they could have been discussing Sears Holdings, Turnarounds, CEO job....

Who knows

 

 

 

[Luke 532]

Short (as of 5/30/2014): 15.877M

Lampert/Berkowitz/Tisch: 80.348M

Outstanding: 106.451M

Float: 26.103M

Short interest as % of float: 60.8% (assuming zero shares are long-term oriented other than Lampert, Berkowitz, and Tisch).

 

[Luke 532]

Lampert unloads another 932,000 shares of AN (June 3rd - 5th).

http://www.sec.gov/Archives/edgar/data/350698/000118143114023030/xslF345X03/rrd411140.xml

 

...and another 412,000 shares of AN gone (June 6th - 10th): 

http://www.sec.gov/Archives/edgar/data/350698/000118143114023582/xslF345X03/rrd411434.xml

 

He also added more to SHOS:

http://www.sec.gov/Archives/edgar/data/860585/000118143114023564/xslF345X03/rrd411430.xml

[merkhet]

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/lands-end/msg175835/#new

 

Land's End resultats are out:  http://www.marketwatch.com/story/lands-end-profit-boosted-by-higher-sales-margins-2014-06-12?reflink=MW_news_stmp

 

Interesting info, same-store sales increase 3.4% for Sears store locations!

 

Thought I'd cross-link this in the Sears thread.

[merkhet]

I came across something interesting today in a Freakonomics podcast from May 14, 2014. (https://itunes.apple.com/us/podcast/freakonomics-radio/id354668519?mt=2&i=313081767)

 

Levitt talks about a consulting gig where he's studying advertising for a large company. The company was uncertain whether newspaper insert ads were adding value or not, and Levitt suggested that they hand over 40 markets to him so that he could run an experiment. He wanted to randomly assign 20 markets to a group with no newspaper inserts for three months and keep the other 20 markets the same. Sounds good, right?

 

The immediate response was "Are you crazy? We can't not advertise in 20 markets. We'll all get fired!" As luck would have it, it turns out that, the previous year, a summer intern screwed up a purchase order and accidentally forgot to order inserts for a big chunk of Pittsburgh for an entire summer. (Natural experiment!) So they had data on whether this had an effect -- so they studied the data and found that there was no impact whatsoever.

 

Levitt then said, that's great. So let's do a larger experiment and give me the 40 markets. Their response? "Are you crazy? We can't not advertise in 20 markets. The CEO will kill us!" And so despite having some insight that the newspaper inserts might not work, five years later, they're still spending close to a billion dollars putting inserts into newspapers.

 

My mind immediately snapped to Sears and how people seem to vilify ESL for experimentation when, in fact, not experimenting is significantly worse.

[Luke 532]

Another transaction under the radar: http://www.10news.com/money/local-kmart-store-abruptly-closes-dozens-of-employees-out-of-work-061114?autoplay=true

 

A Sears Holding Corp. representative told 10News the store located at 5405 University Avenue was "closed to the public, effective Wednesday, June 11" because "another retailer has signed a contract to take over our lease ..."

[heth247]

Another transaction under the radar: http://www.10news.com/money/local-kmart-store-abruptly-closes-dozens-of-employees-out-of-work-061114?autoplay=true

 

A Sears Holding Corp. representative told 10News the store located at 5405 University Avenue was "closed to the public, effective Wednesday, June 11" because "another retailer has signed a contract to take over our lease ..."

 

What happens to the inventory when they close a store abruptly like that?

[CorpRaider]

Short (as of 5/30/2014): 15.877M

Lampert/Berkowitz/Tisch: 80.348M

Outstanding: 106.451M

Float: 26.103M

Short interest as % of float: 60.8% (assuming zero shares are long-term oriented other than Lampert, Berkowitz, and Tisch).

 

 

How nasty would that squeeze be if they did announce mullaly was taking the helm?

[Luke 532]

Lean and light is the name of the game for Sears’ mobile site

http://www.internetretailer.com/2014/06/12/lean-and-light-name-game-sears-mobile-site

 

A few excerpts:

 

The chain retailer’s mobile commerce site tops the Keynote Mobile Commerce Performance Index for the third week in a row with a mixture of functionality and low page weight.

 

“Sears checks all the right boxes with respect to mobile performance standards,” says Krishna Reddy, mobile performance evangelist at Keynote.

 

“Sears is definitely an example of excellent mobile performance and functionality,” Reddy says.

 

Sears is No. 5 in the Internet Retailer Top 500.

[adesigar]

Lean and light is the name of the game for Sears’ mobile site

http://www.internetretailer.com/2014/06/12/lean-and-light-name-game-sears-mobile-site

 

A few excerpts:

 

The chain retailer’s mobile commerce site tops the Keynote Mobile Commerce Performance Index for the third week in a row with a mixture of functionality and low page weight.

 

“Sears checks all the right boxes with respect to mobile performance standards,” says Krishna Reddy, mobile performance evangelist at Keynote.

 

“Sears is definitely an example of excellent mobile performance and functionality,” Reddy says.

 

Sears is No. 5 in the Internet Retailer Top 500.

 

Yes the site is lightening fast and looks fine. But I don't know how much to believe with it being ranked 5th. Sears doesn't give out any details so how do they know Sears online sales?

 

Ive found reference to it here as well but we cant know for sure

http://www.top500guide.com/top-500/

 

[Luke 532]

 

How nasty would that squeeze be if they did announce mullaly was taking the helm?

 

Or if they announce a REIT...

I was recently caught in a short that gapped over night by 30% because of a reit conversion, on my list of risks for this short, I had never considered that.  The Company is PENN, we're talking about a single entity, special special purpose REIT conversion.  The market is hungry for yield and they really don't care what kind of asset it is.

 

I think with SHLD, one of the catalysts will always be a short squeeze.

 

Or if they buyback shares...

The fact that they referred to their flexibility with how they can use the proceeds and the mention of their share and debt buyback authorizations makes me think that they're very likely to buyback shares using the proceeds from Sears Canada and/or Sears Auto.

 

Or a host of other moves they could make...

I get short squeeze optionality, turnaround optionality, some other billionaire just bought 20% of the company optionality, Eddie rolls his holdings into SHLD and buys an operating business to offset the depleting operating losses and utilize tax asset optionality, just paid off the pension by selling a few trophy malls optionality, all kind of optionality.