October 21, 2007 / 4:07 PM / in 10 years

Sears' riches may be lay in the ground-Barron's

NEW YORK, Oct 21 (Reuters) - Although Sears Holdings Corp (SHLD.O) has taken its knocks, its worth may lay in hedge fund honcho Edward Lampert’s ability to turn it around over time and the value of its real estate, according to an article in Barron‘s.

In its Oct. 22 issue, Barron’s said the retailer’s real estate has considerable value that is not reflected in the company’s share price.

The stock closed at $130.89 on Friday.

Combined with the value of brands such as Kenmore and Craftsman, the company could have a liquidation value of more than $300 a share, Barron’s said.

Lampert, who cobbled the company together from Sears and once-bankrupt Kmart, and his hedge fund ESL Investments, controls or has the support of shareholders that have about 60 percent of the stock. He has been working to turn around the company. He has changed the product mixture to feature higher-margin merchandise and is beginning to push big ticket items into free-standing Kmart box locations, Barron’s said.

However, the fallout from the housing market could crimp consumer spending and stall the turnaround, Barron’s said.

    Yet, the company’s real estate may deliver the ultimate returns to investors.

    Bill Ackman, whose hedge fund Pershing Square recently bought 5 million shares, has calculated that the Sears’ U.S. retail real estate at just $8.5 billion of its total $20 billion enterprise value, Barron’s said.

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