Edward S. Lampert isn’t backing away from Sears Holding Corp. so much as investors are walking out on him.
Lampert, who has taken a hands-on role at the company as chief executive officer, acknowledged in a regulatory filing this week that his stake in Sears had fallen to 51.6 million shares, or 48.4 percent of those outstanding. The 51-year-old investor who cut his teeth at Goldman Sachs had been in control of the majority of the retailer, beneficially owning 55.4 percent in March. The turning point seems to have come Monday, when Lampert’s ESL Partners investment vehicle gave 7.4 million shares of Sears — valued at about $450 million at the time — to compensate investors who were pulling money out of the fund. Since then, the stock has fallen 17 percent, closing down 1.9 percent Thursday to $49.98.
But that appears to cover just a small part of the exodus as big-time investors back away from Lampert.
The Wall Street Journal reported that institutional investors who pumped about $3.5 billion into Lampert’s ESL Investments Inc. via Goldman Sachs are pulling back their money after a five-year lockup period expired. Most of the funds are getting paid back this year through stock and cash distributions, according to the report. RELATED STORY: Sears Loss Widens in Q3 >>
That’s a blow to Lampert, who bought Kmart out of bankruptcy and combined it with Sears, but failed to create a Warren Buffett-like empire out of the ailing retailers.
Most experts now see Sears as a company that’s methodically being liquidated, with money from the sale of stores or the spin-off of divisions making up for operating shortfalls.
“They have to sell assets every year to fund cash burn,” said Mary Ross Gilbert, an analyst at Imperial Capital.
Gilbert said Sears’ operations would not be impacted by the stock distributions, but noted the company would likely feel squeezed by other strategic moves on the way, including a potential Lands’ End divestiture.
“As they sell off the jewels, you’re left with two very unprofitable businesses in Sears and Kmart,” Gilbert said.
The analyst has an underperform rating on the stock, which she said should garner $19 a share as an ongoing business. In what she described as a generous liquidation analysis, Gilbert said the pieces of Sears Holdings add up to $44 a share.
Representatives for Lampert and Goldman Sachs did not respond to queries Thursday afternoon.
A new Joan Rivers coffee table book, titled “Joan Rivers Confidential,” gives readers never-before-seen photos and letters of the late comedian throughout her life. “Because of her drive to always be fresh, she kept records of every appearance, every performance, all the jokes that were used on TV, all the clothes that were worn,” said Rivers’ daughter Melissa. Here, Rivers poses at the “Tonight Show” in Tracy Mills in 1985. Read more about the book and see more photos at WWD.com. #wwdeye
After a career at New York hot spots like Narcissa, Dovetail and Nix, @chefjfraser has expanded to the West Village with The Loyal, a modernized take on an American brasserie. “And as I’ve gone through my career I’ve felt some departure from that kind of simple, straightforward [cooking]. This is meant to take on the idea of ‘what if the American brasserie was invented today?’” #wwdeye (📷: @chinseephoto)
@bellahadid and @lilyaldridge at @bulgariofficial’s celebration on Friday night, toasting the brand's new Peter Marino-designed flagship on Fifth Avenue. The two-part event included a cocktail party at the store followed by a dinner at a mystery location — the Met Cloisters. #wwdeye
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews