Lampert’s Kenmore offer seems like more shuffling of chairs on Titanic’s deck
The truth is not many retail industry watchers took Sears Holdings CEO Edward Lampert seriously when he told shareholders at the company’s annual meeting in May that the company was “fighting like hell” to turn its business around. A new Wall Street Journal report that Mr. Lampert’s ESL Holdings, the largest shareholder of Sears stock, has offered to buy the company’s Kenmore brand for $400 million is unlikely to change that perception.
Mr. Lampert, it’s fair to say, has long been seen by many as the person who took two struggling retail businesses — Kmart and Sears — and systematically deprived them of the resources needed to compete while personally profiting from the sale of assets that made the chains unique in the marketplace.
Back in April, the Journal reported that Sears had been looking to sell off several businesses, including Kenmore, for a couple of years without success. An unnamed person familiar with the matter told the paper that Sears thought it could get $500 million for Kenmore.
ESL’s interest in acquiring Kenmore is being positioned as a way to give Sears needed cash to avoid bankruptcy, a scenario that many see as likely whether a deal is made or not. Sears Holdings has cut corporate jobs, closed hundreds of stores and sold off assets such as Craftsman tools in previous bids to cut costs and raise cash. None to date have changed the downward trajectory of the business.
Last year, Sears made a deal to make Kenmore appliances available for sale on Amazon.com. While Amazon owns the inventory, it uses Sears to deliver and install the purchased appliances. When the deal was originally announced, it was positioned as a way for Kenmore to regain market share. The brand saw that share fall to 10.3 percent from 16.7 percent over a four-year period.