Can a New CEO Turn Sears Around?
Sears Holdings Corp. (NASDAQ:SHLD) may be able to make up for some of its lost ground with the instatement of a new chief executive in February, at the end of its fiscal year. The new chief executive, Edward Lampert, will step in to replace Lou D’Ambrosio, but will he have a positive effect?
Out with the old:
Leaving due to family health matters, D’Ambrosio held the chief executive title at Sears for less than two years, but he has had an impact on the company’s success. Though D’Ambrosio had no prior experience in retail, he brought technological know-how to the company that helped boost online sales 20 percent year-on-year for the holiday season. Unfortunately, the small technological turnaround was not enough to stymie the downward trend for Sears, as in November the company still turned out a 5.8 percent loss in sales and $77 million year-on-year increase in losses — a trench which has continued since 2007.
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In with the new(-ish):
Lampert has already put in a number of years at Sears and is currently chairman of the company. In his time there, he has seen 23 consecutive quarters of sales declines, $3.14 billion in losses in the previous fiscal year, and he merged the company with Kmart. Sears has also undergone some streamlining, with many retail stores closing up, spinoffs of its smaller stores and Sears Canada, and sales of its popular brands at other retailers’ stores.
With a little luck, Lampert may be able to use his new position to turn the company around. The recent streamlining should help him reel in the steep losses a little, and D’Ambosio’s tune-up on the Internet sales should help the company stand stronger against companies with powerful Internet presences, like Amazon (NASDAQ:AMZN). With a 60 percent stake in the company, Lampert has as much incentive as anyone to reinvigorate the age-old retailer. Lampert may be coming in just at the right time, as the company says it would have posted profits between $132 million and $212 million for the current quarter if it wasn’t facing a couple pension-related costs.
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