The longest-running and worst-kept secret in retailing is that Sears is undergoing to slowest corporate liquidation ever and that the icon of American capitalism will eventually be relegated to the history books, possibly as soon as next year. This primarily takes the form of Sears’ controlling shareholder and CEO running the company’s decreasing number of stores into the ground, thus requiring him to close more stores—including an entire country’s worth of them—and sell off its valuable parts to finance the continued decline of those stores, often to himself. Such a program requires a two-part pantomime, specifically pretending that these moves will hasten Sears’ transformation into something that might survive the next NFL season, and that Lampert only wishes to buy these valuable parts as a philanthropic way to achieve that.
Well, Eddie, start singing:
Edward Lampert, the chief executive of Sears Holdings Corp., has offered to buy the company’s Kenmore brand for $400 million in cash, according to a letter Mr. Lampert sent to Sears’s board…. ESL also proposed buying the home-improvement business of the Sears Home Services division for as much as $80 million….
“Completing the acquisitions of Kenmore and [home-improvement] will enable Sears to improve its debt profile and liquidity position, creating the runway to help continue its transformation,” ESL said in an emailed statement.
In his letter to the board, Mr. Lampert said ESL is planning to work with third parties to solicit interest in purchasing all or a portion of Sears’s encumbered real estate, including the assumption of debt secured by the properties. The transaction would allow for the stores’ continued operation, he wrote.
Specifically, by doubling the cash Sears has on hand, which cash it needs, because it’s burning through more than $1 billion every three months or so. And Eddie Lampert would very much like those stores to continue operating. After all, he is the CEO, and most CEOs would like to see the things they chiefly execute continue executing, but also because Lampert’s hedge fund, which both owns Sears and is its largest creditor, is earning a fat 8% to 11% on that pile of debt, so the longer he can keep this charade going, the better.