Everyone except chairman and CEO Eddie Lampert thinks that Sears Holdings is in an inescapable death spiral, as the company sells its brands and real estate and lays off employees. Today, the company outlined plans for the near future that are more of the same: selling more real estate, selling off more key Sears brands, and depending on the Shop Your Way rewards program and e-commerce when the customers it still has aren’t especially interested in either.
While today’s announcement boosted the company’s stock price a bit this morning, according to Reuters, there’s not much there that should excite shoppers. The company is putting proceeds from selling some of its stores and selling the Craftsman tool brand toward paying down debt and toward its employee pension obligations, which is fiscally responsible but doesn’t do much for making its department and discount stores more appealing places to shop.
“To build on our positive momentum, today we are initiating a fundamental restructuring of our operations that targets at least $1.0 billion in cost savings on annualized basis, as well as improves our operating performance,” Lampert said in a statement.
Consolidating similar parts of the Sears and Kmart businesses should be the entire point of a merger like the one that brought Sears and Kmart together over a decade ago, so is there anything to this plan that hasn’t been part of the company’s unsuccessful “path to profitability” to date?
The announcement also outlines plans to put another $1 billion in real estate on the block, but eventually the company will run out of stores and offices to sell to other companies or to its real estate investment trust. It will be left as a retail company with a smaller network of leased stores, and the danger is that it won’t figure out how to actually sell things that customers want before then.