Billionaire hedge fund manager Edward Lampert will take the helm of one of his ailing portfolio companies, Sears Holdings (NASDAQ:SHLD), after current chief Lou D’Ambrosio announced he’d be stepping down for family reasons.
No doubt, Lampert has made savvy investments in retailers like Autozone (NYSE:AZO) and AutoNation (NYSE:AN). But his deal for Sears — which involved the merger of Kmart — has turned out to be a dud. The company has had to fight against tough rivals like Walmart (NYSE:WMT) and deal with the shift to e-commerce, led by Amazon.com (NASDAQ:AMZN) — and it has been losing that fight by a landslide.
Lampert faces enormous challenges to get SHLD back on track. He’ll need to find ways to invigorate the merchandising as well as take actions to raise more cash (think asset sales).
Of course, considering his fund — ESL Investments — has a 56.2% stake in Sears, Lampert certainly isn’t lacking for motivation.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.