Maybe Eddie Lampert Knows What He’s Doing With Sears?

Today’s hot take: There’s a method to this seeming madness.

Eddie Lampert has dug himself a pretty deep hole in his role as Chairman, CEO, largest shareholder, major bondholder and cheerleader-in-chief at Sears Holdings. But he’s also weaved a really tangled web. Just look at this thing.

 (Wall Street Journal)

(Wall Street Journal)

And so while it may appear that this is an unhinged man throwing good money after bad, there is at least a possibility that Sears will not be Lampert’s undoing. For instance, while it may have appeared to be stark madness to spend $170 million to double his hedge fund’s stake in failing Sears Canada just before Sears Canada declared bankruptcy, Lampert spent free money he had just gotten from Sears Canada in the form of dividends on it, and in doing so protected his much larger investment in Sears Holdings. Likewise all of the hundreds of millions of dollars he’s lent the retailer that he runs: Sure, he could lose it all if Sears goes belly-up, but for as long as he can keep it from doing so, he’s getting 8% to 11% on the loans.

Maybe, after all, Eddie Lampert does not need to be saved from himself. Maybe he’s the Sam Hinkie of retailing. Maybe it’s time we started to trust the process.

Dismantling Sears to Save It [WSJ]