The 5 Dumbest Things on Wall Street This Week: Jan. 11
2. Sears Strikes Out
New York Yankees boss George Steinbrenner had nothing on Eddie Lampert in the game of hiring and firing his skippers.
In the latest managerial switcheroo at the iconic retailer, Sears (SHLD) announced Tuesday that Chairman Eddie Lampert will take the top job from Louis D'Ambrosio, who is stepping down due to a family member's health issue. Sears shares sank over 6% on the news that D'Ambrosio was done as CEO and Lampert, whose holding company owns over 55% of the Sears stock, was moving into the corner office.
Not that Lampert wasn't minding the store the whole time, mind you.For those not keeping score, Lampert hired D'Ambrosio in February 2011 to replace W. Bruce Johnson. Johnson, for the record, was hired to replace Alwyn Lewis in 2008. Lewis, in case you forgot, replaced Alan Lacy, who joined Lampert's ranks in 2005 after the billionaire hedge fund manager bought Kmart out of bankruptcy and smushed it together with Sears. Tally it up, and you'll see that Lampert's latest selection makes him Sears' fifth CEO in seven years. Heck, the only change that Lampert didn't make was bringing back Billy Martin from Yankee heaven (or Red Sox Hell) to run the former world champion retailer. That said, tinkerer that he was, Steinbrenner was never bold (or stupid) enough to relocate from the owner's box to the dugout to manage the Bronx Bombers himself. And that, apparently, is what Eddie seems intent on doing this time, much to the dismay of the analyst community, which has repeatedly pleaded with the one-time Wall Street darling to stop fiddling while Sears burns. And like the Bronx during the summer of 1977, Sears surely is burning. The company said Monday that its net loss for the current quarter will be between $280 and $360 million, or between $2.64 and $3.40 a share. Sales at Sears have been declining yearly since 2007, certainly not a streak Joe DiMaggio would envy. Let's be honest -- even Marilyn could hit better than that. Look, what Lampert needs is his version of Joe Torre. Somebody who can bring some serenity to the organization as it tries to beat its rivals. And on that note, the Red Sox and its Green Monster are nothing compared to the monstrous competition Sears faces from like likes of Wal-Mart and Target. That said, even with a steadying force in Sears dugout, there seems to be little doubt that the company is taking itself out of contention. Lampert's game plan has been to sell stores and assets in order to raise cash. And unlike Steinbrenner's well-known spending sprees for available (although sometimes questionable) talent, Lampert has been starving his stores of capital to the point where shoppers have been staying away in droves. We honestly don't know what Lampert's end game is for Sears. It was all about the value of the real estate at one point and then it was all about the company's brands. We're not sure what his next pitch will be. But we do know that unless he changes something soon at Sears, the mighty Eddie has struck out.
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