This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sears Needs New Leadership Immediately, if Not Sooner


NEW YORK (TheStreet) -- J.C. Penney (JCP) was a painful disaster for Bill Ackman and his hedge fund investors in 2013. Ackman had the right idea but the wrong retailer. What if, instead, he had set his sights on Sears Holdings (SHLD)? I think his plan to revitalize a failing retailer would have been genius with the right fit. Sears enjoys many competitive advantages compared to smaller competitor J.C. Penney.

One needn't look any further than each company's products to know that Sears has the greater potential. You probably can't name two principal household brands owned by Penney's, but Sears owns Craftsman, DieHard, Kenmore and others.

It's difficult to imagine now, but it wasn't that long ago that Sears was the largest American retailer, before it surrendered to Wal-Mart (WMT). Sears continued its slide towards irrelevance as Target (TGT), Best Buy (BBY), Ebay (EBAY) and Amazon (AMZN) surpassed the retailer in total merchandise sales.

Sears has the tools, but not the craftsman to get the job done. The company is missing the one element needed most: leadership focusing on customer service. Current CEO and chairman of the board Edward Lampert may have a keen grasp on business finance from his time at Goldman Sachs (GS), but in retail and merchandising, he's a rudderless boat. Since 2010, Sears, a.k.a. the S.S. Going Nowhere, has drifted mostly lower, and losses continue to erode shareholder value.

It's time for new leadership at Sears. Someone with the skill set of Ron Johnson would make an excellent fit. After his time at Target in merchandising and at Apple (AAPL), Johnson is well prepared to take the reins at Sears. At J.C. Penney, Johnson was fighting with one hand tied behind his back. Simply put, J.C. Penney doesn't have brand pricing power that he can monetize as effectively as he could at Sears. Unfortunately for shareholders and employees alike, Lampert's strategy was to bastardize valuable Sears brands to Kmart (also owned by Sears) in an attempt to increase sales.

There are better Kmarts, but in many locations, they're one small step away from flea market status. And TheStreet's Rocco Pendola and Brian Sozzi recently documented the mess at more than one location of Sears and J.C. Penney.

The problem faced by shareholders is that Sears Holdings isn't a financial company, it's a retailer. It appears this fact is lost upon the leadership. As desperate as the front line staff is to perform; they're not given the tools to succeed.

I highlighted a service issue that demonstrated how far the company is willing to allow a customer to fall through the cracks this summer. Sears's problem wasn't pricing, product knowledge, availability, or location. Sears's defects are logistics, customer service and procedure. It shouldn't take two hours to complete a sale for a storage unit and gas grill, and when the order gets screwed up, it shouldn't take several visits and phone calls to get it right.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs