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SHLDQ - Sears Holdings Corp


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Yet another SHLD finance executive has left the company - in addition to the CFO:

 

https://www.sec.gov/Archives/edgar/data/34115/000119312516706496/d246150d8k.htm

 

 

Claire’s Stores, Inc. (the “Company”) has appointed Scott Huckins to serve as its Executive Vice President and Chief Financial Officer, effective October 5, 2016. Mr. Huckins, 49, succeeds J. Per Brodin as the Company’s principal financial officer.

Mr. Huckins served as Vice President and Corporate Treasurer of Sears Holdings Corporation from June 2012 through September 2016. From February 2010 to May 2012, Mr. Huckins was Vice President and Treasurer of RSC Holdings, Inc. Mr. Huckins served as Principal of Pioneer Advisors from September 2008 to January 2010. From February 2001 to September 2008, Mr. Huckins served in various roles at Koch Industries, Inc. and affiliated companies, including serving as President and Chief Executive Officer of Koch Financial Products, LLC, Chief Financial Officer of Koch’s Capital Markets Division, Corporate Treasurer of Koch, and Chief Financial Officer of a wholly-owned Koch Portfolio Company. Prior to Koch, Mr. Huckins served as Vice President of Capital Markets and Director of Strategic Planning at FINOVA Capital Corporation from June 1994 to January 2001 where he focused on asset securitizations. Mr. Huckins has a B.S. in Finance from Arizona State University and MBA from Northwestern University’s J.L. Kellogg Graduate School of Management.

 

 

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Yet another SHLD finance executive has left the company - in addition to the CFO:

 

https://www.sec.gov/Archives/edgar/data/34115/000119312516706496/d246150d8k.htm

 

 

Claire’s Stores, Inc. (the “Company”) has appointed Scott Huckins to serve as its Executive Vice President and Chief Financial Officer, effective October 5, 2016. Mr. Huckins, 49, succeeds J. Per Brodin as the Company’s principal financial officer.

Mr. Huckins served as Vice President and Corporate Treasurer of Sears Holdings Corporation from June 2012 through September 2016. From February 2010 to May 2012, Mr. Huckins was Vice President and Treasurer of RSC Holdings, Inc. Mr. Huckins served as Principal of Pioneer Advisors from September 2008 to January 2010. From February 2001 to September 2008, Mr. Huckins served in various roles at Koch Industries, Inc. and affiliated companies, including serving as President and Chief Executive Officer of Koch Financial Products, LLC, Chief Financial Officer of Koch’s Capital Markets Division, Corporate Treasurer of Koch, and Chief Financial Officer of a wholly-owned Koch Portfolio Company. Prior to Koch, Mr. Huckins served as Vice President of Capital Markets and Director of Strategic Planning at FINOVA Capital Corporation from June 1994 to January 2001 where he focused on asset securitizations. Mr. Huckins has a B.S. in Finance from Arizona State University and MBA from Northwestern University’s J.L. Kellogg Graduate School of Management.

 

CFO's don't like bankrupty's on their resume. I think a CFO leaving is generally much worse than a CEO leaving, because the CFO does know the numbers (or at least should).

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http://finance.yahoo.com/news/moodys-sears-kmarts-shutdown-imminent-142719415.html

 

Think it would help if Sears would separate out the financials - online vs traditional retail.  Might show there is some slim hope for viability ...

 

Could be that

 

1) financials are very hard to separate out in a clear cut format as they are all entangled

 

2) online business not at the point where it looks good enough to be separated out (and might cause more of an alarm) or

 

3) doesn't want competitors to know yet what its moves are and where the focus on the new business is ... i.e. if the new business isn't as strong yet, best to let it grow a while further without heavy winds blowing

 

In a sense, I have to give it to this guy Eddie for his tenacity, stamina, and single focus ...

 

 

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This entire SHLD saga just seems like one extremely long game of poker that Lampert and Berkowitz have been playing.  We are all left constantly trying to figure out their game plan or their next move.

 

As Buffett says, "Only when the tide goes out do you discover who's been swimming naked."  I think the tide is rapidly starting to go out for SHLD.  We should finally soon see if Lampert & company are clothed.

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This entire SHLD saga just seems like one extremely long game of poker that Lampert and Berkowitz have been playing.  We are all left constantly trying to figure out their game plan or their next move.

 

As Buffett says, "Only when the tide goes out do you discover who's been swimming naked."  I think the tide is rapidly starting to go out for SHLD.  We should finally soon see if Lampert & company are clothed.

**SPOILER ALERT**

 

 

 

 

 

 

 

They aren't clothed.

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This entire SHLD saga just seems like one extremely long game of poker that Lampert and Berkowitz have been playing.  We are all left constantly trying to figure out their game plan or their next move.

 

As Buffett says, "Only when the tide goes out do you discover who's been swimming naked."  I think the tide is rapidly starting to go out for SHLD.  We should finally soon see if Lampert & company are clothed.

**SPOILER ALERT**

 

 

 

 

 

 

 

They aren't clothed.

 

 

Lol.......I tend to agree with you.

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  • 3 weeks later...

Eddie has also put out a blog rubbishing talk of a K-Mart shutdown.

 

https://blog.searsholdings.com/eddie-lampert/committed-to-our-members-kmart-and-our-transformation/

Last week, we announced a partnership between Shop Your Way®, Sears Auto Centers and Uber. This is another example of how we are transforming Sears Holdings to focus on serving our Shop Your Way members in a wide variety of ways. You should expect additional partnerships over time emphasizing our Shop Your Way business and demonstrating ways that we will bring value to our members’ lives every day.

 

I also wanted to comment on the frequent false and exaggerated claims surrounding our Kmart business. Recent reports have suggested that Kmart will cease its operations. I can tell you that there are no plans and there have never been any plans to close the Kmart format. In fact, we’ve been working hard to make Kmart a more fun, engaging place to shop, powered by our integrated retail innovations and Shop Your Way. To report or suggest otherwise is irresponsible and is likely intended to do harm to our company to the benefit of those who seek to gain advantage from posting these inaccurate reports.

 

There are a few things that are very important for you to keep in mind. First, Kmart continues to operate over 700 stores. Second, a significant number of these stores are profitable and have been profitable for many years. Third, we have been clear that we are intent on improving the performance of our unprofitable stores and, if we cannot, we will close them. Actions to improve our store productivity, including reducing inventory stored in the stockrooms, are designed to make our stores easier to operate and to eliminate unproductive inventory and processes. Decisions to close stores are never easy, but we recognize that the way people are shopping is changing significantly. This is why we have made major investments in our online and mobile platforms and this is why our focus on serving members through Shop Your Way is so important.

 

We are acting more aggressively and continuing to evaluate stores as leases expire and as other opportunities present themselves that improve the economics of Sears Holdings. We expect to end up with a large chain of stores, some owned and some leased, but with a company focused on serving members broadly through Shop Your Way rather than exclusively or predominantly through our stores. Our stores remain extremely important to our future, but as part of an overall focus on serving our Shop Your Way members.

 

We are working to restore the company to profitability. Our significant asset base gives us the wherewithal to fund our business, but we don’t intend to use our asset value to support losses. Focusing on our best members, best stores and best categories means a smaller overall store footprint, and one that still represents one of the largest number of stores and square footage in the United States. We have a process underway to create value by positioning our Kenmore, Craftsman and DieHard businesses as well as our Sears Home Services business to benefit from broader distribution and partnerships that will allow them to grow beyond Sears Holdings. We also possess a significant portfolio of real estate assets with an opportunity to create value through improving our retail productivity and by monetizing them in a variety of ways.

 

While the retail environment generally has been challenging and we won’t be able to restore profit immediately, we are focused on executing our plan and establishing a foundation from which Sears Holdings can grow for years to come. It isn’t easy and there will be bumps along the way, but we have tens of thousands of hard working men and women dedicated to transforming the company and making our members lives better and easier every day.

 

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Hmm, reports of ~$2 billion for Craftsman...

 

http://www.bloomberg.com/news/articles/2016-10-04/sears-s-craftsman-said-to-draw-interest-from-black-decker-tti

 

I think Berkowitz pegged a $5 billion-ish number on Craftsman, Kenmore, DieHard and Home Services.

 

I think they used KCD (Kenmore, Craftsman, Diehard) assets/IP to back their captive reinsurance operation.  Wonder what the sale of Craftsman does to that?

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This news on Stanley Black & Decker (SWK) buying Newell's Tool Division is bittersweet. 

 

One one hand, the valuation multiple was very high at 2.67 X Sales.  Sales of $750 and  Price of $2.0 Billion.

 

On the other it raises the potential that Stanley Black & Decker might have used all their appetite on the Newell acquisition. 

 

Considering the success of the Stanley Black & Decker Merger in Nov, 2009 which created an $8 Billion juggernaut, they might have the appetite for a few acquisitions.  Newell's sales are only $750 million compared to SWK's $11 Billion.  Craftsman's sales were reported to be $2.2 Billion in 2012.  Maybe $1.5 Billion now?  Would they pay $3 Billion for Craftsman?

 

 

 

 

SWK Deal in 2009: http://www.nytimes.com/2009/11/03/business/03deal.html?_r=0

 

Newell Tool Deal 2016: http://www.usatoday.com/story/money/business/2016/10/12/stanley-black--decker-newell-tools-irwin-lenox/91935900/

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On the other it raises the potential that Stanley Black & Decker might have used all their appetite on the Newell acquisition. 

Bittersweet is the word, Stanley Black & Decker were supposedly one of the interested parties in Craftsman as well. Looking at SWK's balance sheet, I would almost certainly say that they cannot make any more acquisitions. Their debt to EBITDA position will be at about 3x after this. To buy craftsman they'd be going to more like 4x, which I think the bankers would almost certainly not allow.

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Their TTM EBITDA  is over $1.8 Billion and their net debt before this acquistion is $3.6 Billion.  That's 2X. 

 

After this acquisition they'll be at 3X.  Going to 4.5X, or less if they decide to issue some shares to pay for the transaction, could be totally fine for a company as stable as SWK.  Even during the Great Recession SWK was profitable. 

 

My conclusion is that financially they'd be fine paying $2 to $4 Billion for Craftsman. 

 

 

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What a disaster for Sears - even if they aren't in as much trouble as the media suggests - things like this will kill them and could be a self-fulfilling prophecy. 

 

If you are a CEO of a supplier and everyone else stops selling to Sears except you, how does that make you and your company look if you suffer losses?  This is scary for Sears and mostly bothers me because I like rooting for Eddie and Bruce.

 

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What a disaster for Sears - even if they aren't in as much trouble as the media suggests - things like this will kill them and could be a self-fulfilling prophecy. 

 

If you are a CEO of a supplier and everyone else stops selling to Sears except you, how does that make you and your company look if you suffer losses?  This is scary for Sears and mostly bothers me because I like rooting for Eddie and Bruce.

 

Reflexivity correct?  Vendors are worried about getting paid so they don't supply the stores.  The media gets wind of it and then you start seeing stories on the 11pm news "Sears suppliers refuse deliveries before Christmas on bankruptcy fears."  What's that do?  Consumers think "empty shelves" and don't go, which further exacerbates Sears' problems and down the drain it spirals.

 

This is why the CEO needs to be the company's biggest cheerleader.  Out there pumping things up right until the day they fail.  At least with behavior like that the impending is delayed.

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