Investors did not seem pleased with the changing of the guard at Sears Holdings Corp.
This story first appeared in the January 9, 2013 issue of WWD. Subscribe Today.
Shares of Sears fell 6.4 percent Tuesday to close at $40.16, following the announcement the night before that Sears Holdings’ chief executive officer, Lou D’Ambrosio, will step down due to “family health matters.”
He is set to leave on Feb. 2, when the fourth quarter ends. D’Ambrosio will remain on the board until the next annual meeting of shareholders held in May.
Edward S. Lampert will assume the role of ceo. Lampert is already chairman of Sears’ board. The hedge fund executive is also chairman and ceo of ESL Investments Inc. Lampert is the majority stakeholder in Sears via his personal stake in Sears’ shares, as well as those owned by ESL.
Lampert took Kmart Corp. out of bankruptcy in 2003 by buying the discounter’s debt to gain a controlling stake. He then engineered the acquisition by Kmart of what was then known as Sears, Roebuck & Co. in 2004, renaming the combined firm Sears Holdings. Sears continues to operate stores under the Sears and Kmart nameplates.
Separately, the company said it expects a net loss attributable to shareholders for the quarter ending Feb. 2 of between $280 million and $360 million, or a loss of between $2.64 and $3.40 a diluted share.
On an adjusted basis, excluding the $450 million related to a noncash charge for pension items, net income is expected to be between $132 million and $212 million, or between $1.25 and $2 a diluted share.
Although the generally accepted accounting principles result for the quarter will mean three consecutive quarters of losses, that’s still an improvement from the year-ago quarter for fiscal year 2011 when Sears posted a $2.4 billion loss, or $22.63 a diluted share. In spite of the losses, Sears still managed to rack up $41.6 billion in annual volume in 2011.
In 2012, Sears partially spun off its interest in Sears Canada, as well as completed a rights offering for its Sears Hometown and Outlet stores.
Sears expects to report fourth-quarter earnings on Feb. 28.