Sears Holdings needs money. After nine straight quarters of losses, Sears Holdings announced plans to raise roughly $380 million through the sale of all but 12 percent of the shares it holds in Sears Canada. This move comes after the company was unable to find a buyer for its 51 percent of Sears Canada in an auction.
The parent company of Sears and Kmart said it is counting on the sale of the Sears Canada stock along with $500 million in proceeds from the Lands' End spinoff, $165 million from real estate transactions and $400 million in a short-term loan from ESL Partners, the hedge fund run by Eddie Lampert, Sears Holdings chairman and CEO, to provide additional funds heading into the Christmas holiday selling season.
Mark Cohen, a former chairman and CEO of Sears Canada, who left the company in 2004, called what has happened to his former company "a tragedy." Mr. Cohen, who is now a professor at Columbia University's business school, told the Financial Post, that people used to call him "nuts" for his belief that Mr. Lampert's plan all along was "to essentially liquidate the business."
Douglas Campbell, the current CEO of Sears Canada, recently announced he is stepping down from the position to return to the U.S. to deal with family issues. Mr. Campbell said he would continue to serve as CEO of the company until Jan. 1 of next year if a replacement could not be found sooner.
Kevin O'Leary, chairman of O'Leary Financial Group, told the Business News Network (BNN) that the sale of Sears Canada stock is a way for Mr. Lampert to keep Sears Holdings afloat while he attempts to figure something out.
In the end, however, Mr. O'Leary thinks Sears will be looking at liquidation within three years unless it finds a master merchant to replace Mr. Lampert as its leader. "No amount of financial engineering is going to save the company if nobody shops there," he told BNN.
- Sears Holdings Corporation Announces Intent to Conduct Rights Offering of Sears Canada Shares - Sears Holdings Corporation
- Sears Holdings Corporation Provides Update on actions to generate liquidity, fund its transformation and evolve its capital structure - Sears Holdings Corporation
- Sears Holdings Plans Share Offering For Sears Canada - Bloomberg News
- Sears Canada 'tragedy' seen as victim of overreach by U.S. hedge fund tycoon Edward Lampert - Financial Post
- Sears will be gone in 36 months: O'Leary - Business News Network
- Sears Canada Announces Leadership Change - Sears Canada Inc./CNW
- Sears Canada auction flop darkens outlook - New York Post