Just days after taking over the CEO role at Sears Holdings (
SHLD
), Eddie Lampert has furthered his gradual dominance of the
company by increasing his shareholding.
GuruFocus Real Time Picks reports
that Lampert increased his Sears stake by 0.79% at the average
price of $41.30 per share on Jan. 9, 2013.
The purchased raised his ownership in the company to 56.5% of
shares outstanding, and elevated his share count to 42,606,190.
News of the event sent shares up 7.4% in midday trading.
SHLD
data by
GuruFocus.com
Sears' market value has gained almost 31% over the past year,
although the company reported tepid fourth quarter-to-date
performance on Jan. 7. Sales at Sears Domestic stores had edged
up 0.5% quarter to date and declined 1.6% year to date. Kmart
sales fared worse, declining 3.8% and 3.7% in the same time, for
overall declines of 1.8% and 2.6%.
Declines were driven by poor performance in the consumer
electronics category of both Sears and Kmart. Excluding that
category, overall sales decreased 0.2%.
The increase in Sears Domestic sales was driven by appliance and
apparel sales, as the company prepares to mark its sixth
consecutive quarter of comparable store apparel sales increases.
The company expects fourth quarter EBITDA between $365 million
and $465 million, compared to $351 million last year, and
full-year EBITDA between $560 million and $660 million, compared
to $277 million last year.
"We expect to generate domestic EBITDA improvement for the fourth
consecutive quarter, and have reduced net debt by $400 million as
of December 29, 2012," said former-CEO Lou D'Ambrosio.
The same day it issued the update, Sears announced that Eddie
Lampert would take the helm as CEO, replacing Louis D'Ambrosio, a
former IBM (
IBM
) executive, who joined the company several years ago, and was
leaving for family health reasons. Lampert said in the release:
"In light of Lou's decision to step down, the Board feels it is
important that there is continuity of leadership during this
important period of transformation and improvement at Sears
Holdings. I have agreed to assume these additional
responsibilities in order to continue the company's recovery and
sustain the momentum we are experiencing, as well as further the
development of the management team under the distributed
leadership model, which provides our business unit leaders with
greater control, authority and autonomy. Working closely with the
Board, management and our dedicated associates, we will remain
focused on executing our goals, improving operations and building
sustainable long-term value for shareholders. All of this starts
with delivering great experiences to our Members."
Many suspect that Lampert, who formed the company almost eight
years ago, has already been effectively running it as chairman.
Many also suspected that Lampert bought the company originally
for the real estate value. Lampert countered the claim in a
conversation with the Chicago Tribune last week, confirming that
he planned to keep the company in business:
"I've never denied there was substantial real estate
value in the company," Lampert said. "Suffice it to say that ...
the most value can be created if we actually transform it."Aside
from the Sears chairman role, Lampert has no official retail
experience, though he has been a heavy investor in AutoNation (
AN
) and AutoZone (
AZO
) over the years and pushed for changes in the companies.
Lesser investments in retail in his current portfolio include Big
Lots (
BIG
), Orchard Supply Hardware (
OSH
) and Gap (
GPS
).
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