3 CEOs Who Must Be Fired Immediately

NEW YORK (TheStreet) --

I believe the entire retail industry is headed to where we already are.

I initially reacted with stunned disbelief to that comment from Sears Holdings (SHLD) CEO Eddie Lampert in his company's annual letter to shareholders.

But then I continued reading ...

First, the financials. Net loss attributable to Sears Holdings' shareholders was $358 million and $1.4 billion, respectively, for the fourth quarter and full year of 2013. This compares to net loss attributable to Sears Holdings' shareholders of $489 million and $930 million, respectively, for the prior year fourth quarter and full year.

And it started to make sense.

While there's no question Lampert is as delusional as they come, he's onto something. The abject state of physical retail will lead to more companies posting billion dollar losses and cheering loyalty programs that have been around for years, but have yet to move needles, stop bleeding or inspire consumers. 

Here's additional delusion from Lampert: 

While our financial results remain challenged, 2013 may have been the year that justifies why so many people across Sears Holdings have been working for several years on our transformation from a traditional, store-based retailer to a membership company that serves its members across an integrated retail platform.

I don't even need to explain the cluelessness inherent in that excerpt. It's just mind boggling. And, if it didn't come from one of America's most inept CEOs, I might not believe it.  

I'm not inside Lampert's head so I don't know if he really believes the crap he says. That somehow he's ahead of his time, but, I know this ... whether he believes it or not is immaterial. It is crap. With that comment, Lampert proved he's so lost that if you showed him a picture of his rear end next to a hole in the ground, he wouldn't be able to tell the difference.

And things aren't much better at Best Buy (BBY) or J. C. Penney (JCP).

Lampert needs to go. And the boards at BBY and JCP need to follow by firing Hubert Joly and Mike Ullman.

Just to check myself, I asked Belus Capital Advisors CEO and TheStreet analyst Brian Sozzi if my initial reaction to the Sears, Best Buy and JCP reports was correct. All three companies have, by and large, burned the furniture to build fires, relying on cost-cutting measures and discounting to feign turnaround:

Dead on brotha. These have been some of the most confusing earnings reports I have read through in some time. Charges. Odd lingo. The raw sales aren't there for any of the company's from the stores. Online looks good (even rose 10% at Sears). But the market response to all the reports 100% due to short-term impact of costs cuts offsetting price investments.

I have spent months outlining the core problem at these brick and mortar retailers here at TheStreet.

From November 2013:

This (seemingly positive short-term results) is what happens when you put MBA types or retail lifers in charge of a situation that requires dynamic wholesale transformation.
Managers can be fantastic at cleaning up near-term messes by cutting prices, realigning "teams" and slashing expenses. However, cats of this ilk tend not to be the best visionaries. The very thing physical retailers need, they lack and, worse yet, refuse to secure.

And from earlier this year with the focus on Best Buy:

If you removed the inventory from BBY, SHLD and JCP stores, nobody outside of a retail real estate salesperson would be able to tell the difference. Each building represents the soulless shell of a once-thriving industry treated with utter disrespect by Jeff Bezos and Amazon.com (AMZN) ...
Take products that intrigue and inspire, rearrange them around the store and you can make believers (or momo chasers) out of otherwise intelligent people.
Sign me up for Hubert Joly's gig. Please. I'll do my best not to feel guilty to the point of suicide for effectively stealing my salary from the rolls of a public corporation.

The story hasn't changed.

Figuratively speaking, Lampert, Joly and Ullman continue to steal money from the coffers of the public corporations they work for.

I mean I guess they're doing their jobs if they've been dispatched to stabilize things in the near-term. If, of course, you can call what they're doing meaningful stabilization. It does no good for the heart attack patient if medical staff brings him back to even, but fails to ensure he can thrive for many years after things went awry.

These CEOs and the portions of their rank and file that misguidedly believe in what amounts to business as usual are doing absolutely nothing to lay the foundation for and effectively implement sound futures at Sears, Best Buy or JCP. In fact, they're doing the opposite.

Call them the great enablers of retail.

It's not like they're even running the retail equivalent of, say, Vancouver's needle exchange program. It would be one thing if there was some thought beyond the culture of obviousness that persists in this dying sector. But there isn't.

Lampert, Joly and Ullman keep the false and toxic hope alive that the very same or some barely tweaked variation of what failed retail in the past will, miraculously, drag it from the abyss. That once external forces right themselves in this world, retail will get back on the road it left. They say they're looking within and recent results aren't good enough ...

To be clear, it is not because our performance is where we need it to be. It isn't (More Eddie "National Lampoon's" Lampert).

But that's clearly lip service because it's not accompanied by action that indicates a period of critical evaluation, thoughtful introspection and wholesale organizational change. 

They're enablers. In the true sense of the word. Addicted to the same old drugs that got them into the mess they're in.

--Written by Rocco Pendola in Santa Monica, Calif.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks. Rocco Pendola is a columnist for TheStreet. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

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