(Bloomberg)—Getting long-struggling Sears to stop bleeding cash has been about as easy as closing the U.S. military prison in Cuba, according to Chief Executive Officer Edward Lampert.
Speaking at the company’s annual shareholders meeting Wednesday, Lampert compared his quest to President Barack Obama’s struggle to close the detention camp in Guantanamo Bay.
It’s “not so easy,” said Lampert, who is also the retailer’s biggest investor. “Our focus right now is to show people that we can get this company back to profitability.”
More than a decade after he merged Sears and the formerly bankrupt Kmart, the 53-year-old Lampert is still trying to find a formula that will lift the chains out their protracted slump. The hedge fund manager has invested heavily in digital operations and a loyalty program, the latter of which accounts for about three-quarters of sales. Yet the company has posted losses for five straight years.
It’s Lampert’s intention to return to profit this year, though that’s not a formal forecast, Lampert told reporters after the meeting at the company’s headquarters in Hoffman Estates, Illinois. To do so, Sears is closing stores “more aggressively,” he said.
Once the biggest U.S. retailer, Sears has been selling and spinning off assets as it continues to use more cash than it generates. A large portion of its most valuable store sites went into a real estate investment trust that brought in about $2.7 billion in proceeds last year. The move followed previous transactions that separated its Lands’ End clothing unit and most of its Canadian business.
Yet the retailer lost $1.1 billion last year, making a total of $8.2 billion in losses since 2012, as its cash burn accelerated. That trend prompted the company’s largest shareholder after Lampert to take a more active role.
Bruce Berkowitz, chief investment officer at Fairholme Capital Management, was named to the Sears board in February. While Berkowitz told his investors that much of the cash burn was voluntary and that he expected it to improve, it “does not build confidence or trust among all of Sears’s constituencies,” he said on a conference call in February.
To contact the reporters on this story: Lauren Coleman-Lochner in New York at [email protected]; Kim Chipman in Washington at [email protected] To contact the editors responsible for this story: Nick Turner at [email protected] Mark Schoifet
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