Sears CEO Lampert takes bigger stake in ailing chain, shares jump
A display shows small appliances for sale in 2015 at the Sears store in Schaumburg’s Woodfield Mall. Sears Holdings Chairman and CEO Edward Lampert has bought more of the trouble company’s shares. (Jose M. Osorio / Chicago Tribune)
Shares of Sears Holdings jumped more than 9 percent Monday after Chairman and CEO Edward Lampert bought more of the department store’s shares.
Lampert, already Sears’ largest shareholder, bought nearly 526,000 shares last week, according to a Friday regulatory filing. Earlier that week, Fairholme Capital Management bought up nearly 614,000 shares. Fairholme Chief Investment Officer Bruce Berkowitz is also a member of Sears’ board of directors.
Lampert’s purchases came shortly after Sears acknowledged in a regulatory filing Wednesday there was "substantial doubt" it will be able to stay in business, sending the company’s shares tumbling by about 12 percent.
The department store chain said it lost more than $2 billion last year. Despite the disclosure indicating doubt about the company’s future, "we remain confident in our financial position and remain focused on executing our transformation plan," Chief Financial Officer Jason Hollar wrote in a post on the company’s website Wednesday.
In February, Sears announced a new restructuring plan aimed at cutting at least $1 billion in costs this year and laid off about 130 corporate employees, mostly in its Hoffman Estates headquarters.
The $1 billion target also includes previously announced plans to close 150 Sears and Kmart stores this spring and improve stores’ selection of products while dropping unprofitable categories.
Sears is taking "decisive actions to become a more agile and competitive retailer with a clear path toward profitability," Lampert said in a news release earlier this month.
But it’s still struggling to bring shoppers back. This month, the department store chain said it lost $2.2 billion last year while sales at stores open at least a year continued to slide, down 10.3 percent in the fourth quarter of 2016 compared with the same period in 2015.
As of January, Lampert owned 53.2 percent of the department store chain.