HOFFMAN ESTATES, Ill. May 1 Sears Holdings Corp Chairman and Chief Executive Eddie Lampert used the retailer's annual meeting on Wednesday to reassure investors that he planned to build on the foundation laid by the former CEO to turn around the retailer.
Lampert, a well-known hedge fund manager and the company's controlling shareholder, added the title of CEO in February after Louis D'Ambrosio abruptly stepped down from that role due to a family member's health issue.
Some on Wall Street saw D'Ambrosio's departure as adding to Sears' risks, and pointed to his lack of retail sales experience just as the company is trying to turn around its core Sears and Kmart chains.
Lampert talked about the steps the company was taking to drive more transactions as businesses such as books, music, greeting cards and photo services continue to decline.
Sears, he said, has focused on efforts on its such as its rewards program, Shop Your Way, with its millions of members, and has taken steps to shorten delivery times as it competes with Amazon.com Inc.
It has seen some early signs of success. Online sales rose 25 percent in the fourth-quarter holiday season and 17 percent last year overall, Lampert said at the company's headquarters in Hoffman Estates, Illinois.
Half of the online business now comes from what Sears calls integrated retail, which means using services such as buying online and picking up in a store, or ordering in a store and having goods shipped to a home, he added.
Shop Your Way members, who use their cards online and in stores, drive 60 percent of the company's overall revenue. The company did not say how many loyalty members it has, but Lampert and other executives referred to "members" often during the meeting, emphasizing their importance for Sears' turnaround.
Still, not all shareholders are convinced that Lampert should be the one leading the charge.
The first shareholder to speak at Wednesday's event urged Lampert to step aside and said that the company should have an independent chairman. He also pointed out that the drop in Sears' share price over the years was "not a good sign."
Sears shares fell 2.5 percent to $50.04 Wednesday on Nasdaq. The stock has fallen significantly since its all-time high of $174.35 in 2007.
CHANGING FOR THE FUTURE
The operator of Sears department stores and the Kmart discount chain is trying to turn around its fortunes after suffering from falling sales since 2005, when Lampert merged the two iconic chains in an $11 billion deal.
Lampert told investors on Wednesday that he had spent his first 90 days as CEO trying to get a handle on exactly what the company needs to do and who needs to do it.
While Lampert has faced criticism in the past for not investing enough in stores, he has tied the company's problems to the changing habits of shoppers, who are buying their goods online or using their mobile phones to make purchases.
The retailer faces cut-throat competition from discounters Wal-Mart Stores Inc and Target Corp, department stores and online rivals.
Lampert laid out a strategy called "Member Assist" where in-store employees give shoppers free product advice and assistance through an app on their mobile devices, suggesting goods to buy at the store or online.
The program is a way for staff who are physically in the stores and are familiar with products to embrace the growing desire for shoppers to research products online. Member Assist started on April 1 and is in about 400 stores, mostly Sears locations.
"If we were making more money, we could go much faster," Lampert said when asked about expanding the program.
He said it was too soon to say what impact Member Assist is already having and could potentially have on sales.
"Everything was sort of 'ooh and ahh' but I didn't get any numbers," said Morningstar analyst Paul Swinand, who attended the meeting.
While Lampert appears to be thinking about things the right way, "I didn't get a lot of the meat behind it," Swinand said.
Lampert is Sears' largest shareholder. On his own and through his ESL Investments hedge fund, he held 55.5 percent of Sears' shares as of March 20, according to Thomson Reuters data.
Lampert said that he continued to believe in the viability of both chains. The company will keep looking for the right opportunities to sell its brands such as Craftsman tools in other locations - perhaps internationally or at other online retailers - in ways that do not hurt its own sales, he said.
The company has been "very, very deliberate" in the way it has made its investments, Lampert said, adding that if the company made more money, it could be more aggressive overall.
"We believe we can win through service," Lampert said.