One of Sears Holdings Corp.’s biggest and longest-term shareholders is leaving his position as an independent board member and Wall Street isn’t pleased.

Bruce Berkowitz will be leaving the Sears board at the end of the month after nearly two years. He founded Fairholme Capital Management LLC, which is the retailer’s second-largest shareholder and made its first investment in Sears about a decade ago.

Wall Street didn’t seem upbeat about the change and Sears’ stock fell by 11.5 percent in Monday trading, to close at $5.99. Berkowitz has been one of the only vocal supporters of Sears, which he sees as drastically undervalued given its significant real estate holdings. He’s said the true value of the retailer’s stock sits upward of $90.

Nevertheless, Fairholme on Friday liquidated one of its funds, according to a disclosure with the Securities and Exchange Commission. The fund held roughly one percent of Fairholme’s total Sears stake. Fairholme still holds around 26 percent of Sears’ stock.

Edward Lampert, Sears’ largest shareholder through his hedge fund ESL Investments, in a statement thanked Berkowitz for his “long-term commitment and investment” in Sears and said his “leadership, guidance and counsel as a board member have been invaluable to our company.”

When asked if there was any particular reason for Berkowitz’s departure, a Sears spokesman said only that it was Berkowitz’s decision and that it “was not the result of any disagreement with the company on matters related to the company’s operations.”

“Mr. Lampert and Mr. Berkowitz have a long-standing partnership and continue to have great respect for each other,” the spokesman added.

The spokesman said Sears “has not been informed of any decision with respect to Mr. Berkowitz’s investments in Sears Holdings” when asked if Sears expects Fairholme to pull back from its investment in the retailer.

Berkowitz for his part wished the company “all the best as it continues to execute on its strategic priorities,” but a Fairholme spokesman shed a little more light on why he’s decided to step away from the board. He added that it was not aware that a Fairholme fund holding shares of Sears was liquidated until Monday.

“In accepting the invitation in February 2016, Mr. Berkowitz believed that his board service would enable him to better communicate Fairholme’s perspective in substantially greater depth and detail than would otherwise have been the case,” the spokesman said. “Mr. Berkowitz believes that he has achieved that objective and was pleased to have the opportunity to provide input during the formulation of the company’s strategic restructuring program, which was announced earlier this year.”

The spokesman went on to say that it was Berkowitz’s intention “from the start” for his time on the board to be “as limited as possible.” He added that Berkowitz did not accept compensation related to the role.

Fairholme also holds a sizable stake in bankrupt Sears Canada and over the summer, Berkowitz and Lampert said they were considering a joint investment in the retailer, which broke off from Sears Holdings in 2012. The deal fell through and Sears Canada last week was forced to liquidate.

Berkowitz has long been a supporter of Sears and Lampert, but began upping his stake in the retailer in late 2015, taking more of an activist stance. He pushed the company as a “real estate behemoth in retailer’s clothing.”

During a June conference call with Fairholme investors, Berkowitz put Fairholme’s stake in Sears at around 27 percent of the company and said it also owns a majority of its debt through a 58 percent holding of Sears’ outstanding notes due 2019.

In a television appearance around the same time, Berkowitz said, “From failed retailers come great real estate empires” and after characterizing Sears as a company “very sensitive” to its remaining roughly 140,000 employees, admitted: “At some point…you have to face the realities of the market.”   

Sears’ spokesman said he wouldn’t comment “on market speculation” when asked if Berkowitz’s influence had anything to do with Sears’ seemingly more aggressive moves toward asset sales, including $460 million in real estate so far this year and the recent $525 million sale of its well-known Craftsman brand.

During a June conference call with Fairholme investors, Berkowitz pointed out that Sears has sold at least 2.8 million square feet of its real estate since 2016, with a going rate of about $100 per square foot. He added that “most of the recent store closures are not the company’s most valuable real estate.”

Earlier this year, Sears launched a restructuring aimed at $1.25 billion in yearly cost savings and has since closed closed 150 stores, and another 28 Kmart locations are set to close by December, on top of hundreds more closures over the last decade. At least 400 staffers, including several at the executive level, were laid off earlier this year. Despite these efforts, Lampert continues to float the company with short-term loans, the most recent of which totaled $100 million poised to see the retailer through the holiday season.

While Sears this year inked a deal with Amazon to sell smart appliances in-store and launched apparel company Regatta Great Outdoors, these efforts seem almost perfunctory relative to the continued decline of its retail business.

Speculation of bankruptcy has been following Sears for some time, and the normally coy company even warned in June that its ability to continue as a going concern was shaky as it didn’t have enough cash to keep operating through 2018.

For More, See:

Sears’ Lampert Takes Aim at Opportunistic Vendors

Sears’ New Cost-Cutting Efforts Not Enough for Wall Street

Financial Maneuvers Help Sears Stay Afloat; Merchandise Issues Remain

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