* Decision influenced by family illness - source
* D'Ambrosio steps down after two years at the helm
* Quarter-to-date same-store sales down 1.8 percent
* Kmart same-store sales down 3.8 percent
* Chief merchandising officer Boire seen as next CEO-analyst
By Dhanya Skariachan and Sakthi Prasad
Jan 8 Sears Holdings Corp said late on
Monday Chief Executive Louis D'Ambrosio will step down for
family health reasons after the U.S. retailer reported a 1.8
percent decline in quarter-to-date sales at stores open at least
Edward Lampert will assume the role of Sears CEO in addition
to his current role as chairman, Sears said in a statement late
on Monday. Lampert's hedge fund, ESL Investments, had a 34.14
percent stake in Sears Holdings as of Nov. 30, according to
Thomson Reuters data.
A person close to the situation told Reuters that
D'Ambrosio's decision was influenced by a close family member's
"In light of Lou's decision to step down, the board feels it
is important that there is continuity of leadership during this
important period of transformation and improvement at Sears
Holdings," Lampert said.
Sears spokesman Chris Brathwaite told Reuters that Lampert's
decision to take over as CEO rather than pick an outsider was
mainly at the request of the retailer's board.
Brathwaite said the board wanted to make sure the operator
of the namesake department stores and the Kmart discount chain
did not lose the recent momentum it has had in its turnaround.
Sears faces stiff competition from Wal-Mart Stores Inc
and Target Corp, especially in areas like
electronics. While Kmart has managed to keep some
budget-conscious U.S. shoppers, the Sears chain has been losing
market share in appliances and apparel.
D'Ambrosio was hired in February 2011. He replaced Bruce
Johnson, who had operated as interim CEO since 2008. Prior to
joining Avaya in 2002, D'Ambrosio spent 16 years at
International Business Machines.
In a statement issued to Reuters, D'Ambrosio said "2012 was
a turnaround year for Sears Holdings. We were clear about areas
that we would focus on and we delivered."
While the former Avaya CEO was seen as having technology
experience to help Sears' online business, his lack of retail
experience raised questions about his ability to turn Sears
"D'Ambrosio was good for online, but not the
transformational CEO Sears needed," analyst Paul Swinand of
Morningstar told Reuters. Swinand added that Sears' online
business was a "bright spot" and that D'Ambrosio should get some
credit for that.
Swinand said he expects Lampert to stay on for one to two
years, but that Ronald Boire, chief merchandising officer, is a
top candidate to be CEO later. Prior to joining Sears, Boire was
the chief executive of specialty retailer Brookstone.
"D'Ambrosio helped champion a strategy that helped move
Sears' transformation in the right direction," Brathwaite said,
citing the improvement in the retailer's financial health,
apparel business, online segment and customer loyalty program
during his tenure.
WEAK SAME-STORE SALES
Total domestic comparable store sales for the nine-week
period declined 1.8 percent largely due to sales declines in the
consumer electronics category at both Sears and affiliate Kmart,
the company said.
Kmart recorded a 3.8 percent fall in comparable store sales
for the nine-week period. Kmart's quarter-to-date comparable
store sales decline reflects a significant decline in consumer
electronics, besides weak sales in the pharmacy, grocery &
household and drug categories.
The growing popularity of smartphones as a multi-purpose
device is eating into the sales of other best-selling electronic
items such as digital cameras, MP3 players and camcorders,
leading to a fall in their prices.
Reported net loss attributable to Sears Holdings'
shareholders for the quarter ending Feb. 2, 2013 will be between
$280 million and $360 million, or between $2.64 and $3.40 loss
per share, the company said.
Excluding items, net income is expected to be between $132
million and $212 million, or between $1.25 and $2 per share.
"Over the past 12 months the company increased liquidity by
$1.8 billion, showed EBIDTA growth each quarter and lowered net
debt by $400 million," D'Ambrosio said.
Sears has been closing stores, tightly managing inventory,
selling some real estate and shedding assets to turn its
Sears spun off its Orchard Supply Hardware Stores unit in
December 2011. Last year, it announced plans to sell some prime
real estate and spin off its Sears Hometown and Outlet
businesses and certain hardware stores.
In November, Sears completed its previously announced
spin-off of a portion of its interest in Sears Canada Inc