“He’s so obsessed with moving in the direction he wants to move that sometimes people get burned, trampled on, bumped into,” Rainwater said of Lampert. “I think he has gone about alienating himself from almost everyone who he’s come into contact with.”
A former colleague agrees: “He’s really an extreme guy. There’s something odd about him, I think, his lack of emotional connection to people. . . . It’s so important, but some people just don’t have that. They’re off in their own little world.”
“I’m told, for about two years, Lampert actually attempted to run the business,” says Cohen. “So for about a year and a half or two years the financial performance of Sears Holdings looked pretty good, but in fact all that he was doing was completely cutting capital expenditures and operating expenses….”
[T]hen came the 2008 financial crisis, when, according to Cohen, “Lampert stopped appearing to support the business in any conventional way and started to invest free cash flow in derivatives. He hived off Sears Roebuck’s three consequential brands—Kenmore, Craftsman, and DieHard—into a Caribbean-based wholly owned sub of ESL so the company was paying royalties to Eddie Lampert for the use of its own trademarks.”
Robert Chapman, a California-based hedge-fund manager, calls Sears Holdings “a total shit show” that is in “secret liquidation” mode.
Cohen believes that a bankruptcy filing is inevitable, and that Lampert will end up benefiting from it because he will be able to “walk away” from onerous store leases and other liabilities, such as the underfunded pension plan, and get rid of those assets that he hasn’t been able to sell.
“We’re fighting to survive—that’s pretty clear,” Lampert says.
And here is the result:
Shares of Sears Holdings Corp. are on pace for their best weekly performance since June after the April issue of Vanity Fair, published this past weekend, featured an interview with the department store’s CEO Eddie Lampert…. Sears’ shares are on pace to close up 22 percent this week, even after falling as much as 6 percent on Thursday. The stock declined in each of the past three weeks.
Investors seem pretty chuffed that Lampert says he’s a “normal person” when he’s in Florida, and also that he managed to get through his first major interview in a decade-and-a-half without running screaming from the room crying, “It’s over! It’s all over!” But maybe they shouldn’t be: After all, the Sears debacle—bad as it is—isn’t nearly as bad as knowing you should be dead.
You see, right before he took control of Kmart—the appetizer for the Sears deal—a scary ex-Marine and three jamokes kidnapped Lampert. The four were hoping for a nice payday, but once Renaldo Rose, the ex-Marine, realized what a bunch of clowns he was dealing with, he had another idea.
It still haunts Rose today that he might not have gone to prison had he killed Lampert and the other kidnappers: “So it was either like, O.K., get rid of everybody. [But] with Shemone Gordon, [Lampert] was like family almost. He argued against all that. I still think we should have just got rid of everybody. But, I don’t know. I did have to consider that. Lampert . . . never gave any problems, so I kind of had to keep my word on that.”
Sears CEO Eddie Lampert only gets a salary of $1 a year to run the troubled retailer. But he does get a stock bonus, and for 2017 that bonus increased by $850,000, giving him a 24% raise.
In spite of this:
Sales plunged by $5.4 billion, or 24%, during its fiscal year. Even excluding the impact of closing 428 stores during the year, sales at the remaining stores tumbled 16%. While it posted a rare, narrow profit in the fourth quarter, the company lost $383 million over the course of the full year.
“They Could Have Made a Different Decision”: Inside the Strange Odyssey of Hedge-Fund King Eddie Lampert [Vanity Fair]
Sears Has Best Week Since June After CEO Opens Up in Vanity Fair [Bloomberg]
Despite its struggles, Sears CEO gets raise [CNN]