Lampert’s Captain Ahab Act Can’t Save a Sinking Sears

(Bloomberg Opinion) -- Say this about Eddie Lampert: He is nothing if not persistent.

A Thursday securities filing shows he has made a $4.6 billion bid for Sears Holdings Corp., the retail giant that was forced to file for bankruptcy protection in October after years of deterioration under Lampert’s stewardship. The effort would keep open hundreds of the retailer’s stores and save 50,000 jobs.

The Sears that would remain would be a husk of its former self. As of the end of its most recent fiscal year, the company employed 89,000 people; only five years earlier, it counted 274,000 workers in the U.S. and Canada.

Buying some more time for Sears may have a certain sad logic to it for Lampert, who is a chief creditor and has been keeping the company afloat with financial engineering for years. As Bloomberg News so aptly described last week, the bankruptcy has plunged Sears into a “Wall Street Wonderland where, to the uninitiated, up might seem like down.”

If the takeover allows Sears to hang on for longer than it would have otherwise, it may help provide temporary stability to other Lampert holdings, such as Lands’ End Inc., which still sells apparel through Sears stores, and Seritage Growth Properties, the REIT he created to buy Sears’s real estate.

But this 11th-hour salvage attempt seems like a pointless exercise because the core businesses of Sears and Kmart are so irrelevant and beyond repair.

Consider that consumer sentiment has been quite strong this year. In fact, Target Corp. CEO Brian Cornell has said this might be the best consumer environment he’s seen in his entire career. Plenty of retailers have made the most of it, including Sears’s department store peers, Macy’s Inc. and Kohl’s Corp., whose shares have popped amid improved performance. And yet comparable sales continued to sink for Sears. If it can’t do better against this very favorable backdrop, when can it ever?

Lampert does not lack for ideas to prevent Sears from dying, including an attempt earlier this year to sell the Kenmore brand. But the problem is, so few of them are about making Sears or Kmart into a better retailer. That is the essential flaw underlying all these machinations. 

At this point in the Sears saga, retail scribes have used up pretty much every metaphor imaginable to say this company is doomed. It’s been said to be on life support, a zombie, the walking dead.

When there were reports last week that a Lampert takeover bid was in the works, I emailed Noel Hebert, a Bloomberg Intelligence analyst, to ask if this was “shuffling deck chairs on the Titanic.” His response? “Probably more akin to trying to clamber into a few lifeboats, that were themselves damaged by the iceberg, while in the middle of an Atlantic hurricane.”

That’s how far gone this thing is.

I suppose I remain happy that the remaining Sears workers might get to bring home paychecks for a bit longer. But they should be eyeing the exits before they, like this iconic company, are done in by Lampert’s delusions.

To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.

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