Sears Holdings Corp.
) fell 7.7% yesterday after it revealed that Edward S. Lampert's
firm, ESL Partners has reduced its stake in the company. However,
Lampert did not distribute his personal stake in the financially
stressed retail company.
Lampert declared his hedge fund company's disbursement of 7.4
million shares of Sears Holdings to investors who wanted to
withdraw their money from his firm. The move has brought down his
firm's stake in Sears Holdings to 48.4% on Dec 2, 2013 from 55.4%
as of Mar 19, 2013. Despite this, Lampert, who is the chief
executive and chairman of Sears Holdings, remains the largest
shareholder of the retail company.
Sears Holdings has long been grappling with soft top and
bottom lines performance. The company's restructuring initiatives
have not been successful and Sears Holdings is constantly lagging
Dollar Tree Inc.
While Sears Holdings appeared to be returning to the growth
trajectory when it posted improved year-over-year bottom-line
results for all the quarters of fiscal 2012, the results of the
first three quarters of fiscal 2013 have dampened investor
sentiment. During all these three quarters, the company's loss
per share has widened substantially on a year-over-year
However, in an attempt to boost its financial performance,
this Zacks Rank #4 (Sell) company has undertaken a number of
measures, such as reducing investment in sections of the company
that no longer contribute significantly to its growth. Moreover,
Sears Holdings intends to lower the number of Kmart and Sears
full-line stores to slash costs.
Last month, the company's unit Sears Canada Inc. successfully
terminated leases at 5 stores - 4 in Ontario and 1 in British
Columbia - as part of its turnaround strategies to enhance
operations. These outlets had 965 staff in total.
Moreover, as part of Sears Holdings' transformation plans
announced in October, the company has decided to spin off its
Lands' End and Sears Auto Center businesses. The sale will
expectedly provide the company additional liquidity and
facilitate better focus on its core business.
At present, Sears Holdings is concentrating on cost
containment, inventory management and implementation of
merchandise initiatives to inflate margins. We commend the
company's strategy of capitalizing on opportunities, while
augmenting performance through its revamped organizational
structure and new operating model. All these measures will
expectedly improve its top and bottom lines, going forward.
DOLLAR TREE INC (DLTR): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
SEARS HLDG CP (SHLD): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
To read this article on Zacks.com click here.