Why Is Sears So Hated?

It is time to speak the truth about Sears Holdings (SHLD - commentary - Cramer's Take). All of the disaster scenarios did not come true. All of the stuff on TV and in the press about what was supposed to happen -- a true debacle -- didn't happen.

In fact, the opposite.

Now, I want you to put aside a couple of negatives: Eddie Lampert, a friend, who runs the company, should not have bought stock all the way up. That was a mistake. He admits it.

Put aside the fact that the stores may not be what you want to shop at. I have a nice one, but it is often empty. Forget for a moment that Lampert "missed the window" of selling lots of real estate at higher prices.

But let's look at what is happening here. Sears made money in the fourth quarter. In fact, it made pretty much what it made last year. HOW MANY RETAILERS CAN CLAIM THAT?

Second, the debt that everyone was so worried about? Read the release: "We repaid all borrowings under our revolving credit facility as working capital needs declined as expected." That's what Eddie expected. It is not what the bears expected.

Third, sure the comps are down. But so are everyone else's. Yes, sales were boosted by "layaway" plans. But that's like a credit card, for heaven's sake. We accept the notion of credit cards, don't we? Comps may be down, but so is inventory. Impressively, actually.

Fourth, all of this was done before the rationalization of the store base. It took a while -- longer than I would like -- but Lampert is now ready to start closing underperforming stores. What would the comp stores look like without the bad ones? I bet substantially higher. Same with the overlap between Kmart and Sears.

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