Comments on Will Morrissett's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/will-morrissett/articles http://seekingalpha.com/article/58436-sears-holdings-a-business-plan?source=feed#comment-240785 240785 Thu, 28 Aug 2008 09:47:23 -0400
You seem to be oblivious to the huge array of problems at Sears.

After the release of earnings today - 8/28/08 - it should be quite clear to any thinking investor that SHLD is deeply troubled in its core business, and is only propping the stock by drawing down inventory (both in quantity and quality) to raise cash to buy back the stock...while it still can.

Almost 60% of Q2-08 earnings were from an accounting adjustment, not operations.

I look for a much lower price point for SHLD within a few months - maybe $40?

What say you?]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-129336 129336 Thu, 20 Mar 2008 11:37:03 -0400 Businesses outbidding themselves for Sear's products to be sold is great.
Sears is a holding company and not just a retailer.One can see this by Sears dividing up the businesses.
The key here is all the businesses do well including the stores.
In other words,massive,massive profits for Sears.
One more point not too many shares out there to cover short positions easilly.Eddie is buying them all up,,,,,,,another good sign.

]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-129100 129100 Wed, 19 Mar 2008 22:25:06 -0400 Selling brands, sub-letting, etc are low margin and terminal strategies. From an equity investor stand point I would not think it is a smart idea. There ought to be easier and better ways to make money.
]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-128071 128071 Tue, 18 Mar 2008 07:50:51 -0400
At least we seen something productive come out so far.

That is going to be the key revenue stream for Sears.]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126773 126773 Sat, 15 Mar 2008 00:02:22 -0400
LTholder- Well put.

Value Guy-Give me a day.

Man,this is fun.]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126738 126738 Fri, 14 Mar 2008 20:15:36 -0400 http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126712 126712 Fri, 14 Mar 2008 18:31:08 -0400 http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126416 126416 Fri, 14 Mar 2008 09:30:49 -0400
If I may I will start with the rhetorical question. It's no so much that Kmart has bad locations (though every retailer has a few they don't like) as it is that for them to get a tenant to lease their store the tenant must either not have a store in that location already or that the location Kmart has must be seen as an upgrade. Let me use an example. A few years back when CC was restructuring part of that restructuring was moving from one location to another. The reason for this was that because in many markets Best Buy had the "A" location and CC had the "B" or "C" location. The reason CC wanted to move as part of their restructuring was because they felt part of the lack of sales came from not having the best location in the area. So in some instances they moved from a "C" location to a "B" location and in other instances they moved from a "B" location to an "A" location. So if Kmart has an "A" location they are willing to part with then supermarkets etc would be interested. However, there is a lack of "A" and even "B" location across the country and most of the potential tenants are already in those locations because when you send you real estate team out to find new stores most companies care much more about location than price per square foot. Of course even if Kmart does have a location you want to move to, if you already have a lease you can't just pick up and move. Therefore, the person who would lease the space must find a new tenant for their space. So I view Kmart as more going after new tennats in the area. You are right in the sense that you could put other things in the space besides a store, but you seem to make an assumption that I also disagree with and have not introduced yet to my own fault which is Kmart locations are not necessarily right for each business. Kmart may have many locations which does not interest say a Supermarket because that location does not bring in a lot of supermarket traffic. When Kmart years ago looked at space they looked for the best locations for them and sometimes what is a good location for kmart would be a bad location for HD, LOW, SVU, SWY etc. This has nothing to do with whether its an "A", "B", or "C" location, but just rather that is not where a supermarket or big box retailer like HD necessarily wants a store.

In terms of malls, Sears may want to leave the mall, but they need to do 2 things first. First they need to find a tenant and second they need to make sure it is ok with the landlord that they leave and the new tenant shows up. Assuming landlord approval, I still contend you will have trouble finding new tennats because not many people are looking to expand right now in this economy.

I agree that you can raise money and invest SHLD's cash. I just think if he was going to turn SHLD into another Berkshire he would not go out and raise cash. Now he could turn SHLD into something similar to Berkshire from the perspective that Eddie also goes out and buys other businesses. However, I would argue that restoration hardware is not the same type of blue chip company Warren buys.

I would conclude that I think most retail even the ones I own are dead money right now. I am buying them for the same reason you are buying SHLD which is you see tremendous value down the road. So I have no problem with a wait and see approach. ]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126351 126351 Fri, 14 Mar 2008 07:48:23 -0400
On the landlord issue, I think you are over estimating the market saturation of some retailers. Lowe's has 1/2 the HD locations; Target has 1/5 the WalMart locations; Costco has 534 stores; Bj's 172. This doesn't even scratch the surface of grocers, including low-end (Super Valu, Food Lion) to high-end (Whole Foods, Fresh Market). And, the idea a big box can only be a big box lacks creativity. Off the top of my head, what about bowling alleys, car dealerships, furniture stores, or warehousing?

Those are options for the K-Mart stores, but the on-mall Sears locations have even more options: Macy's, Dillard's, Neman Marcus, JC Penny, Kohls, movie theaters, anything you can imagine. I don't spend enough time in malls to be more creative.

Through triple-net-leases these properties can offer some cashflow, free capital improvements, and less tax and utility expenses for Sears Holdings.

In regards to stock purchases, their is no mutually exclusive relationship between making investments via SHLD and raising more money for RBS/ESL funds. For example, this winter Sears made an effort to buy Restoration Hardware while RBS built its HD stake.

This isn't a rhetorical question: Where did the idea that 'K-Mart has poor locations' come from? I understand the upkeep has been minimal/poor but every K-Mart I see is on a main road in a urban/suburban area.

Thanks ValueGuy, this is fun. Sorry if I got mean in that last response. I was still annoyed by that first post by Idiotrod.]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126246 126246 Thu, 13 Mar 2008 21:07:24 -0400
In terms of investing through SHLD with SHLD's cash position, I still contend Eddie would be buying a stock through his hedge fund and not through SHLD. The reason I have this assumption is because Eddie was out not to long ago trying to raise more capital. I believe he was using GS to help. He must of looked at the math and said I would rather use GS to help me raise $ and then charge my fee rather than make those investments through the cash I have in SHLD. Eddie is a very smart guy and someone I respect tremendously so I assume he ran the math both ways to figure out what benefits him the most and in the end the decision was to retain GS to raise more capital.

Since you made a disclosure it is only fair I do the same. I have no position in this name so I am not bashing it as a short. ]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126231 126231 Thu, 13 Mar 2008 20:09:43 -0400 Real estate isn't real if you sell it. They can become landlords of companies like Target, Lowes, Kroger, and so on. So, obviously, real estate is worth something even when you don't sell. If you actually read the article, I mentioned you in paragraph one, "The ignorant and impatient regularly call for a fire sale of assets as if they have no on-going value." Pure selling of assets is no way to create permanent wealth.

As for the 2 and 25 charges, if Sears grows, Mr. Lampert's stake grows along side; so why wouldn't it be in his best interest to improve Sears through various investments and acquisitions? 2 and 25 means his fees equal 2% of assets and 25% of returns. How is that a disincentive to invest in a controlled Holding Company? Think about it. SHLD goes up in value, he makes more money. ]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126221 126221 Thu, 13 Mar 2008 19:39:08 -0400 http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126154 126154 Thu, 13 Mar 2008 17:00:25 -0400 http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126056 126056 Thu, 13 Mar 2008 13:42:09 -0400
The same can be said about Kenmore. Whirlpool manufacturers the Kenmore brand along with many others, including Maytag, Ammana as well as the Whirlpool brand itself. On top of that, Sears has lost market share to competitors like Home Depot and Lowe's in metropolitan areas. That is why they are desperately trying to set up dealer stores in adjacent areas to stop the "bleeding".

Certainly the Craftman's brand is well recognized in the marketplace. But there is strong competition and Sears has chipped away at the brand value by curtailing the life time warranty in a number of areas. If you don't it, try taking a Craftman's product back to a store some time.

The bright light is Lands' End, but unfortunately, this may end up being a case of guilt by association. Instead of bring the rest of Sears apparel up to the lands' End standard, they are at risk of pulling Lands' End down to the lowest common denominator.

And don't place the real estate on such a pedestal. Look where the Kmart stores are located. Changing demographics left them behind long ago. On top of that, they are so old, many of them have asbestos issues to deal with should a potential buyer wish to redevelop the premises.
]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-126043 126043 Thu, 13 Mar 2008 13:13:36 -0400
2- No attempt has been made to quantify this cash flow or the possible cashflow from real estae operations. The potential lies in how inexpensive the leases are and what potential lies in each individual property. Good luck 'quantifying' so many unknowable variables.

3- DieHard is a branded commodity like Hienze ketchup or GEICO insurance. All of these brands represent strong future cashflow.

4- Comparing SHLD to early BRK is the opposite of what this article said. Sears has strong assets that represent future cash flow if managed corectly. It is this potential cash that will allow for investments in the future.

5- Being Buffett-like has nothing to do with words on paper or quotes from interviews. It's action based. Lampert could write children's stories for all I care. And, his personal choices of clothing also have no bearing on the future of this company. Maybe, you could start and ETF of companies run by guys in wrinkled suits.

6- Also, you do realize that this isn't a FAIRX sounding board? Berkowitz doesn't care about your analysis of annual letters and Business Week articles.

7- Notes: Buffett actually ran several floundering businesess including Saloman Brothers. Maytag was aquired by Whirlpool. You have done no actual analysis of Sears. I ate a PBJ for lunch today; am I going to be rich? Thanks for the comments Idiotrod.]]> http://seekingalpha.com/article/68377-unseen-value-in-sears-brands?source=feed#comment-125993 125993 Thu, 13 Mar 2008 11:27:20 -0400
How about quantifying the vaunted real-estate value if it's so great? Why do I doubt it, given the attention Lampert has received?

As a substantial FAIRX holder, Berkowitz's recent comments sound disturbingly un-Buffett-like. Paraphrasing his SHLD analysis: "Hey, there are so many ways to make money on this deal. It's either great or really great. I don't see any risk here." That's ridiculous. Why doesn't he display some balanced acumen (which, a-la-Buffett, creates long term confidence, not a just short-term hoped-for price movement via chatter) with points about risk or where his thesis has failed thus far? Don't other retail operations have valuable real estate? Come on. The "DieHard" brand? Get real. What a commodity. And as far as appliance brands, "Kenmore"? Seriously? Maytag had a wonderful brand name and recently went belly up. I don't see anyone clamoring to pay anything significant for that "brand equity". Brands ain't cash flow, friends. FAO Schwartz, anyone? PanAm? A million others... FYI, examples of actual brand value: GEICO. Coke. American Express. Hmmmmmm....

Further synopsis of Berkowitz: "Hey, Buffett bought a dying business and that was the start of his greatness..." Wow, that's illogical. No, Buffett dodged a bullet, and through skill and luck turned his holding company around with other investments. That's what he says anyway. Looking back, he never would have bought Hathaway; he'd have begun with the subsequent investments, no doubt. Banging your head on a rock and then finding a quarter on the ground doesn't mean you should go around banging your head on rocks.

Another Lampert-Buffett comparison point: Buffett never ran businesses. Lampert is trying to be a retail guy. Good luck with that vs. Wal-Mart, Target, Sears, Penneys, Lowes, Kohls, etc. etc. Also, Lampert is a young billionaire with a massive appetite for the high life, while at a similar age Buffett was just getting started with Hathaway, wearing rumpled suits and polyester-blend shirts in Omaha and eating gelatinous processed turkey sandwiches on white bread for his working lunches - very symbolic of a celebrity investor vs. a worker.

Lastly, look at Lampert's language; alternatively defensive, aggressive, frustrated, self-righteous...very, very un-Buffett-like. Despite his phenomenal track record, Berkowitz too is starting to sound more like Lampert than Buffett. Advice to Berkowitz: Re-read a few Buffett shareholder letters and balance out the commentary so your shareholders can learn something. Thanks then. Oh, and remember to thank your shareholders every time you deposit a paycheck, not the other way around. You are in a privileged position through skill and luck. Keep that ego strictly in check, or your investment results will falter.

Berkowitz, I daresay you owe your shareholders a detalied explanantion of your SHLD analysis, your new "core holding", given the eroding value, rather than a Lampert cheerleading session. Lampert has indisputably destroyed shareholder value recently with now deep-under-water share buybacks alone, and you're doing the same, no?]]> http://seekingalpha.com/article/58436-sears-holdings-a-business-plan?source=feed#comment-108033 108033 Thu, 03 Jan 2008 12:19:57 -0500 Problem- Here's how a Sear store gets remodeled.

"Hoffman says it wants it this way"
"Region wants it that way"
"District wants it this other way"
"The Merchandiser wants it over this way"
"The Manager wants it two aisles over"
There's so much wasted time and material (and salary)
That they could have sold more (and made more profit) if they left the store alone. Nothing justifys Sears Culture.]]> http://seekingalpha.com/article/58436-sears-holdings-a-business-plan?source=feed#comment-108029 108029 Thu, 03 Jan 2008 12:07:35 -0500 Leave the stores that are amongst "money" (better locations)
and dump the rest.
Drop the word "Mart"from everything - there already is one.Its a DISCOUNT STORE. When did Walmart get labled a retailer? Sorry, there's a huge difference.
RETAIL is equated with customer service. Sears used to have it. They need to get it back. Can't go "cheap" on this principle.
Then concentrate on fixing what you have left.
Worth of their real estate? Some stores are virtual gold mines. Some are parking lots at best.

Long on Sears- Yes , only with a business plan.


]]> http://seekingalpha.com/article/58436-sears-holdings-a-business-plan?source=feed#comment-107158 107158 Fri, 28 Dec 2007 03:42:51 -0500
The reason I wonder is because if you walk into a Sears, they're fairly junky, leaning more towards a KMart. If they would emmulate Macy's and Target it would be a lot better.

I like your idea of what sears could do and I really dig Lampert. I don't hold a position in SHLD but I'm gonna keep following this and see if goes below $90 and really follow the plan. I'd love to be long on this stock and see it be successful as a retailer as well as an investment portfolio like BErk.

Only time will tell.]]>