If you do a search for Sears this morning, you’ll get back two categories of results. The first is a collection of local media accounts about the impending shuttering of its stores in the Maplewood Mall in St. Paul, Minn., the Countryside Mall in Clearwater, Fla., the Columbia Mall in Columbia, Mo., the Mall at Greece Ridge in Rochester N.Y., the Oaks Mall in Gainesville, Fla., and dozens of other locations once patrolled by shoppers in mid-America. The second result tells the tale of the latest way that chairman and CEO Edward S. Lampert and his ESL Investments intend to “save” the Sears Holdings Corp. from itself.
In a letter to the company’s board yesterday, ESL offered to acquire “all or a portion of” its Kenmore brand, the home improvement business of the Sears Home Services division and the Parts Direct business of Sears Home Services.
“We understand that Sears has marketed certain of these assets for nearly two years but, with the exception of the Craftsman divestiture, has been unable to reach agreement with potential purchasers on acceptable terms,” the letter reads, stating that divesting them now “will demonstrate the value of Sears' portfolio of assets, will provide and important source of liquidity to Sears and could avoid any deterioration in the value of such assets.”
As for the products that were once a mainstay of the American kitchen and laundry room, “it is an iconic brand with substantial value and Sears should aggressively pursue a divestiture of all, or a portion of, Kenmore in the near term,” the letter suggests.
It also states that Lampert and Kunal S. Kamlani, the president of ESL and a Sears board member, would not participate in negotiations on behalf of Sears.
“His letter also makes clear he doesn't necessarily want to buy these assets — he'd be perfectly happy if someone else does. He's hoping his offer will drum up some interest,” points out Chris Isidore for CNN Money. “His offer letter also expresses interest in buying some or even all of Sears' remaining real estate. … It doesn't put a dollar figure on what he's willing to pay — the letter says those specifics will come later.”
“The moves are an effort by Mr. Lampert to inject Sears with cash and stave off a bankruptcy filing, while at the same time allowing the hived-off businesses to grow by distributing their products and services beyond Sears and sister chain Kmart, according to people familiar with the matter,” write Suzanne Kapner and Allison Prang for the Wall Street Journal. “Some critics, however, have argued that the strategy further weakens Sears by giving shoppers less reason to visit the retailer.”
Those reasons have been adding up for more than a decade.
“The offering represents Mr. Lampert’s latest attempt to salvage a once-iconic brand in Sears. The company has been in a precipitous decline for several years, as lower-end shopping malls struggle to attract shoppers and big-box rivals and e-commerce companies gain market share. Even as many other department stores have stabilized their business, Sears has continued to struggle,” Michael Corkery points out for the New York Times.
“We've been waiting for the end for a long time,” Paula Rosenblum, managing partner at retail advisory firm RSR Research, tells USA Today’s Charisse Jones, “and it looks like we're pretty close because now (Lampert's) saying we’d better break it up. And when it’s done, what's left?”
Well, for Lampert, who is 55, at least homes in Indian Creek Village, Fla,. Aspen, Colo., and Greenwich, Conn., according to Wikipedia, as well as a 288-foot yacht named Fountainhead after the seminal book of his hero, Ayn Rand.
“Few people on Wall Street are as polarizing as Eddie Lampert, the billionaire majority shareholder of Sears and Kmart,” writes William D. Cohan in the introduction to a rare interview with the billionaire recently published by Vanity Fair. “His friends say he is reticent, while his critics find him aloof. His pals talk about his very high standards, while some observers say he is condescending, overly critical, and disengaged. Some people praise his determination and persistence, while others see only inexplicable stubbornness in sticking to failed ideas.”
Cohan goes on to list some of Lampert’s major triumphs — most notably investments in AutoZone and AutoNation — that made boodles for investors in ESL including David Geffen, Michael Dell, Thomas Tisch and the Ziff publishing family.
“But today those triumphs are largely obscured by his worst mistake: the 2005 merging of Sears, the iconic retailer whose doorstop mail-order catalogue was once a fixture in nearly every American home, with the downmarket Kmart chain, which he had brought out of bankruptcy in 2003,” Cohan writes.
And there has been nothing “fast” about its demise.