Is there any possible way now to deny that Sears Holdings (SHLD) is methodically, deliberately parsing itself into pieces it can liquidate?
You’ve got the sale of several dozen namesake stores. The spinoff of the Lands’ End (LE) division and Sears Hometown and Outlet Stores (SHOS). Chatter of shedding its Auto Centers. And most recently, the decision to sell its take in Sears Canada,
Sorry, but it’s getting tough to think CEO, hedge-fund manager and large shareholder of SHLD stock Eddie Lampert has any plans other than to break the company apart and hope the sum of the pieces are greater than the current value of the whole.
Sears Canada on the chopping block — it was an idea that SHLD stock holders heard in November of last year, via a New York Post article. Sears Holdings denied the story; the official statement from the company read:
“In particular, it is false to claim that Mr. Lampert, the CEO of Sears Holdings, is interviewing or otherwise is in talks with investment bankers about Sears Holdings’ interest in Sears Canada.”
So much for that. On Wednesday, Sears Holdings confirmed it was looking to liquidate some or all of its 51% stake in Sears Canada.
What a difference six months makes.
Like its U.S. counterpart, sales for the company’s Canadian arm are slumping, and operating profits remain elusive. Yet shares of Sears Canada (which trade in Toronto) have advanced more than 60% since the end of 2012. That rally might mean now is the prime time for Sears Holdings to cash in its roughly $750 million piece of the $1.5 billion Canadian retailer.
Three-quarters of a billion dollars would certainly go a long way for Sears Holdings, which has been losing an average of more than $300 million per quarter for the past few years. The only thing keeping it afloat has been the liquidation of its assets (stores) and divisions like the aforementioned Lands’ End.
Of course, for those investors who’ve been following the Sears Holdings saga for at least a year, Wednesday’s news is no surprise. The only question that the brutally honest segment of Sears’ investor base is asking now is: When will Eddie Lampert actually admit to himself or anyone else who owns SHLD stock that this is a liquidation story, plain and simple?
Reality Check for SHLD Stock Fans & Followers
Were Sears just hitting the skids, it might be easy to buy into the possibility that Eddie Lampert is simply shrinking the company into a defensible position so it can regroup and be reborn.
Problem: We’ve been hearing about a turnaround for Sears Holdings since early 2008, and have yet to see any evidence that a turnaround is underway.