Edward Lampert, the manager and majority owner of Sears Holdings Corp. (Hoffman Estates, Ill.) through his hedge fund ESL Investments Inc. (Bay Harbor, Fla.), has reduced his stake in the troubled retail company from 55 to 48 percent.
Bloomberg News has reported that Lampert, who is also the retailer’s chairman, continues to personally hold about 25 million Sears shares and to control a small number of the retailer’s shares held in other partnerships. His total stake, including Sears stock controlled through ESL Investments, now equals 51.6 million shares, according to a filing yesterday with the U.S. Securities and Exchange Commission.
The move has been explained more as a complicated maneuver to redistribute ESL assets and to avoid selling shares and incurring capital gains that would be taxable to the fund’s other investors than as a loss of confidence in Sears.
“We will continue to focus on the transformation of Sears Holdings into a membership-focused company and on creating long-term value for its shareholders,” Lampert said in an e-mailed statement. “My significant personal ownership in the company is a sign of my confidence and alignment with all shareholders.”
Sears Holdings has been struggling since Lampert engineered the merger of Kmart Holding Corp. and Sears, Roebuck & Co. in 2005. The company has posted 27 straight quarterly sales declines, prompting Lampert’s investors to pull money and causing the billionaire, who took over as chief executive officer of Sears in February, to surrender majority control.
As ceo, Lampert has sought to boost online sales and strengthen customer loyalty programs while controlling costs and divesting of assets, like real estate properties and even its Land’s End division, as the company’s cash pile shrinks. The dwindling resources are making it harder for Sears to improve the outdated stores that have contributed to its loss of customers.