Vornado Stake Raises Sears Speculation

By George Anderson


Vornado Realty Trust didn’t buy a 4.3 stake in Sears because it likes the retailer’s sales prospects. That’s the central theme running through a Chicago Sun-Times article speculating on the Sears future direction.


Vornado is headed by Steven Roth who built the company by acquiring failing retail chains, Two Guys and Alexander’s, and turning the company into a real estate business.


In a conference call yesterday, Deutsche Bank’s senior real estate analyst Louis Taylor suggested Sears’ largest shareholder, Edward Lampert, brought Mr. Roth and Vornado in to help push a sale of the chain’s real estate or possibly divest it with the intention of leasing it back.


According to Deutsche Bank’s Taylor, Mr. Lampert wanted to “bring in someone with money who has the mindset to really do what’s necessary to get at [Sears’] real estate value.”


There was no comment on Mr. Taylor’s speculation from any of the parties.


Moderator’s Comment: What do you think Vornado’s stake in Sears means for the retail chain?


Not surprisingly, Sears’ stock rocketed up on Friday’s news that Vornado had taken a stake in the company.


Deutsche Bank raised its price targets for Sears’ stock to between $55 and $105 from the previous $36 to $67 range. The difference is that it is now factoring
the prospect of the sales value of Sears’ real estate, furnishings, fixtures, equipment and proprietary brands into the equation.

George Anderson – Moderator

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