Who’s listening to Eddie Lampert these days?

Consumers surely don’t pay him any mind, although some investors are likely to cheer if the company goes through with Lampert’s latest idea under consideration: Take 200 to 300 of the best company-owned stores and sell the sites to a new real estate investment trust. While the core Sears Holdings Corp., which shares ESL Investments’ hedge fund manager Lampert as its chairman and chief executive officer, would likely see higher overhead costs as it would pay rents for the locations, the REIT owners could see their shares climb higher as consistent rental income from tenants would help ensure a rate of free cash flow, not to mention the 90 percent of rental income that must be passed to shareholders as dividends. Further, should Sears ever file for bankruptcy court protection, those store assets would already be out of its holdings and unreachable by creditors.

This story first appeared in the December 19, 2014 issue of WWD. Subscribe Today.

Lampert has done something comparable before, when in 2006 the company transferred ownership of Sears’ key brands — Kenmore, Craftsman and DieHard — to a bankrupt-remote entity called KCD that now charges Sears a royalty fee for licensing of the brands.

For Lampert, cash has been the operating word this year. Sears is luckier than most because its pool of assets has enabled the ceo to structure a flurry of maneuvers in 2014 to keep operations afloat.

When Lampert merged Sears, Roebuck & Co. with Kmart in 2005 in an $11 billion deal, subsequently renaming the combined entity Sears Holdings Corp., many lauded him as the next Warren Buffett. Skeptics — who believe Lampert knows nothing about retail and merchandising and was only after the real estate holdings — remain cynical about the merger.

That’s because 2014 has seen one maneuver after another, more or less showing Lampert’s deft financial skills. There’s the Lands’ End spin-off in April that generated a $500 million cash dividend to Sears. Since the fall, there’s been a flurry of action: a rights offering for senior unsecured notes and warrants to raise $625 million in proceeds; a rights offering for Sears Canada to raise $380 million; a short-term $400 million loan from Lampert’s hedge fund ESL Investments and the leasing arrangement for seven Sears sites to house Primark stores.

While Lampert has increased the company’s liquidity, he hasn’t really done anything to persuade observers that there’s still a need for either the Sears or Kmart nameplates. If anything, the most recent round of financial maneuvers suggest to naysayers that Sears is spiraling in the wrong direction.

It isn’t as if Lampert is operating with blinders on, either. In his latest blog on the company’s site, he was candid about no longer being able to keep open the 200 stores the company has said it will close by yearend, and even admitted that many sites “were losing money, some for a long time.” And he acknowledged that “some of our stores are simply too large for our needs, given that populations shift….Restoring them to profitability has been a challenge….None of these transformations are simple.”

As the year ends and rolls into 2015, answers could be ahead.

Are the real estate holdings just the means to the end? Maybe. Is Lampert the financial genius some say he is? That’s still up for debate. Could Lampert’s vision of tomorrow for Sears show some spark that it is taking hold? Or could that vision, in his own words on failed past initiatives, be another one that’s ahead of its time?

Then again, none of that may matter. Given the slowdown in store traffic and the cash burn rate, perhaps 2015 might provide an answer to a question closer to home: At what point in Sears’ time line does Lampert find out that there are just no more rabbits to be pulled out of the same hat?

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