| HOFFMAN ESTATES, Ill.
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
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
"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
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.