Eddie Lampert's Waterfall

It’s been a week or two since anybody called Eddie Lampert “The next Warren Buffett.” And now, it seems, either Bill Ackman got the memo, or even value tramps (not a typo) have stops. From the 13F-HRs of Pershing Square Capital Management LP, vis-a-vis its long dance with Two-Wrongs-Don’t-Make-A-Right (SHLD): 

Jun. 30 2008 (Filed Aug. 14 2008)
Shares: 6,746,568; Value: $496.95 million

Sep. 30 2008 (Filed Nov. 13 2008)
Shares: 501,000; Value: $46.84 million

Ackman did well to scamper when he did. While SHLD ran up from $73.66 on Jun. 30 to $93.50 on Sep. 30 (including a brief sojourn over $100 that month), it closed Tuesday night at $30.19. Oh well, on to the next Target (TGT). 

Whatever you do, don’t buy Sears
by Suzanne Kapner
Fortune Nov. 18 2008

Comments

[investor88:]

Good article on how big money is made and lost.

2008 Nov 19 08:04 AM

[MrsLinarcos:]

Sears hasn't been right since Alan Lacy and Eddie Lampert. The company is deteriorating faster than you guys realize, customers are lacking in the stores. And fast Eddie is too busy buying shares of Auto Nation. When the company falls, the big wigs will do what they do, pat him on the back and he gets his parachute.

2008 Nov 19 08:14 AM

[kctool:]

As a former employee of Sears, I can tell you The Party Is OVER !!!! During my time at Sears I watched as the store fall apart, outdated and worn out equipment would break down and patched with spit and bailing wire. Changes in tool warranty upset customers on a daily basis. Diversion and deception are common practices. There was nothing harder for to do than tell one of my regular customers, that I could not give them what was advertised. Regular customers DO NOT like to hear " Read the fine print".

In my opinion Lampert and his posse have been catching a ride on Sears good reputation. Between starting programs that hurt the company (installation and warranty procedures), and sacrificing quality to increase profit margin. The train is coming into the station.

Before investing people should go to their local store and look around. Do some business and see what is going on. Lampert put a nice face on Sears and increased the numbers "ON PAPER". The front end looks good, but you need to see what is coming out the other end.

Sears is not the same store I remembered as a child. Sears used to be a place to spend the day shopping, wandering and looking. The smell of popcorn lingered in the air.

The Sears I know now is just another store. Selling unpractical wares and promoting gimmicks. Begging for credit applications and protection agreements. Fine print and loopholes abound.

I am emberassed to say I worked there! It would be worse to say I owned some of it.

2008 Nov 19 01:02 PM

[valueinvest...:]

I know in tough times like these I also worry about how a billionaire is holding up. It's a shame to think Eddie may only have $1-$2 billion in personal wealth now.

2008 Nov 20 02:15 PM

[memi:]

SEARS is not going to die. There may be mass closings, but I am fixin to by me some SHLD!


On Nov 20 02:15 PM valueinvestor123 wrote:

> I know in tough times like these I also worry about how a billionaire
> is holding up. It's a shame to think Eddie may only have $1-$2 billion
> in personal wealth now.

2008 Nov 21 12:50 AM

[isteal:]

Why is it that only "former" employees wanna talk trash about Sears? It is probably more to do with the fact that they were fired for being poor associates. Indeed much has changed, in the last 10 years at Sears, but much remains the same. Craftsman / Kenmore customers are still very loyal, and you can be sure that Protection Agreements will forever be part of Sears products. Who knows what the future holds for Sears stores, but I would agree that capital improvements need to be made to stay more competitive with Best Buy & Lowes, etc...

2008 Nov 21 03:05 PM

[current:]

I agree with Isteal in that Sears is still a great place to shop and as a current manager in the stores, I like where I work and the company I work for. I have been with the company for five years and Sears has allowed me the ability to move around to different areas of the company and try different things, paying me well in the process. The majority of negativity that is posted online from the service to the stores comes from people that are disgruntled because they didn't get their refrigerator exhanged after four years, or didn't answer the phone when the technician called and they missed their service appointments. Sears, like any company, has a group of dedicated employees that try hard and get beat up by the general public on a daily basis for it. As far as I am concerned, unless anyone on here actually knows what they are talking about I think they should keep their comments to themselves. Oh yea, and "Thanks for shopping at Sears!"

2008 Nov 24 08:58 PM

[s-mart:]

I am a current Sears Appliance and Hardware manager. While it is true that the company has been trying new things such as "Sears Essentials" and "web to store" ordering; the consistent problem is execution. We are burdened by byzantine operational and logistical systems and a lack of a clear plan on how to get customers back into the building. Our customer base is dying off and not being replaced.
I like working for Sears but I fear our days are numbered.

2008 Dec 19 10:27 PM