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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast