Eddie Lampert Addresses Sears' (SHLD) Problems In a Letter
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In a Form 8-K filed with the SEC this morning, Sears Holdings (Nasdaq: SHLD) chairmen, Eddie Lampert, directly addressed issues discussed by Sear's CEO, Aylwin Lewis during yesterday's earnings report. Specifically, Lampert pointed out that Wall Street and the media have chosen only to feed off of Sears negative comments after the Company reported a 99% drop in earnings, but, as Lampert said, they have "ignored the strength of our company and the progress that we have made."
Coming to Sears' defense, Eddie noted that the Company has been one of few retailers over the last several years that has reduced overall debt levels, while subsequently investing more than $1 billion on capital expenditures, making investments in inventory and buying back over $3 billion of Sears stock.
Mr. Lampert went on to mention that Sears is not the only retailer having trouble, naming Home Depot, Macy's, Kohl's and JC Penney as also having a tough quarter due to macro reasons. Continuing, Eddie reminded investors what happened when JC Penney began opening new stores while keeping expenses down: a Fitch analyst praised JC Penney for such disciplined control of expenses. In contrast, now that Sears has focused on managing expenses, the media often cites this as the "root cause of poor performance."
Addressing one of Sears' largest problems, Lampert said Sears took a "measured risk" in increasing inventories over the last couple of years in an attempt to satisfy customers, but, he said, "Not all of these risks pan out...", pointing out that if the economic environment was different, these actions may have lead to different results. In the letter, Lampert assured associates that by the end of the fiscal year inventory levels would be below that of last year.
Eddie ended the letter by reaffirming that Sears turnaround is a long-term play.
Coming to Sears' defense, Eddie noted that the Company has been one of few retailers over the last several years that has reduced overall debt levels, while subsequently investing more than $1 billion on capital expenditures, making investments in inventory and buying back over $3 billion of Sears stock.
Mr. Lampert went on to mention that Sears is not the only retailer having trouble, naming Home Depot, Macy's, Kohl's and JC Penney as also having a tough quarter due to macro reasons. Continuing, Eddie reminded investors what happened when JC Penney began opening new stores while keeping expenses down: a Fitch analyst praised JC Penney for such disciplined control of expenses. In contrast, now that Sears has focused on managing expenses, the media often cites this as the "root cause of poor performance."
Addressing one of Sears' largest problems, Lampert said Sears took a "measured risk" in increasing inventories over the last couple of years in an attempt to satisfy customers, but, he said, "Not all of these risks pan out...", pointing out that if the economic environment was different, these actions may have lead to different results. In the letter, Lampert assured associates that by the end of the fiscal year inventory levels would be below that of last year.
Eddie ended the letter by reaffirming that Sears turnaround is a long-term play.
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