After Sears chairman and CEO Eddie Lampert saw the retailer decay into an also-ran of retailing on his watch, a rescuer has emerged to pull the chain out of its bankruptcy proceedings: Eddie Lambert.
Many would argue that this development isn’t much of a Christmas present for Sears stores and workers who are holding out hope that the brand somehow will survive. But nonetheless, Lampert took his first step toward an attempted rescue of Sears Holdings from bankruptcy by making a $4.6 billion bid on behalf of ESL Investments, the hedge fund he runs.
His goal, the company said, is to purchase Sears’ remaining 500 stores and preserve about 50,000 jobs remaining at the beleaguered retailer, which entered bankruptcy-court protection in October after decades of dwindling sales, wrong decisions about the future of e-commerce, lack of investment in its physical stores and a wrong-footed acquisition of Kmart—all overseen by Lambert.
The purchase also would include Sears distribution facilities and its Kenmore and DieHard brands.
— New York Post (@nypost) December 6, 2018
ESL submitted its bid in a letter to Lazard Freres & Co., the investment banker for Sears debtors. ESL said its plan “envisages significant strategic initiatives and investments in a rightsized network of large format and small retail stores, digital assets and interdependent operating businesses.
In a prepared statement, the firm wrote: “ESL believes that a future for Sears as a going concern is the only way to preserve tens of thousands of jobs and bring continued economic benefits to the many communities across the United States that are touched by Sears and Kmart stores.”
But while Lambert’s company also said it is “enthusiastic about the continuation of Sears as a going concern and its future potential,” many would argue that it doesn’t have much of a future at all and will never recover from the strategy that Lambert followed over the past several years.
Doubling down on Lambert’s interest and leadership appears to be the only way forward for Sears, its brands and employees. But it’s not something to inspire their confidence.