Sears Eyes New Strategy -- WSJ
May 27 2016 - 03:03AM
Dow Jones News
As the longtime CFO steps down and sales drop, the retailer
looks to transform itself
By Kimberly S. Johnson
Sears Holdings Corp. is losing its finance chief, as the company
remains mired in red ink and explores strategic alternatives for
some of its most-prized brands.
Robert Schriesheim, the Hoffman Estates, Ill.-based retailer's
chief financial officer plans to step down from the role, for which
Chief Executive Edward Lampert selected him in 2011. Mr.
Schriesheim, 56 years old, said he would pursue other career
opportunities and devote more time to the four boards on which he
serves, and to his family.
"I've had a very long and productive tenure and a very strong
relationship with Eddie Lampert," Mr. Schriesheim said. "Eddie is
an unconventional thinker, and I've loved being in a supporting
role."
The announcement came as Sears reported a loss of $471 million,
or $4.41 a share, for the quarter ended April 30, compared with a
loss of $303 million, or $2.85 a share, a year earlier.
Excluding certain items, however, Sears's adjusted loss shrunk
to $1.86 a share from $2 a share.
Revenue fell 8.3% to $5.39 billion. Same-store sales dropped
6.1%. Kmart same-store sales declined 5%, and Sears domestic
same-store sales fell 7.1%.
The company also said it would "explore alternatives" for its
Kenmore, Craftsman and DieHard brands, as well as its home-services
business.
But Mr. Schreisheim cautioned against assuming the result would
be a sale of those assets, explaining the company has retained
advisers to look at "opportunities to explore their potential
growth outside the Sears ecosystem."
Sears is stumbling through efforts to transform itself by
investing in new technologies and services to better equip it for
the digital age. It also has focused on returning to profitability,
homing in on assortment, sourcing, pricing and inventory-management
practices, sometimes at the expense of sales.
During Mr. Schriesheim's tenure at Sears, the company raised
about $9 billion by selling real-estate and business units,
including the Lands' End clothing chain and Sears Hometown and
Outlet Stores.
His length of time at the company is notable because many
executives there "tend to last less than a year or two," wrote
Evercore ISI analyst Greg Melich in a research note. The current
average tenure for retail company CFOs is 5.8 years, according to
Korn/Ferry International.
Mr. Schriesheim joined Sears in August 2011 after a CFO stint at
consultancy Hewitt Associates, which was sold to the insurer at the
time known as Aon Corp. in 2010.
He has a long history of working or partnering with
private-equity firms, hedge funds and large institutional investors
in what he called "in special-situation investments."
He was CFO of Global TeleSystems Group Inc., which owned
telecommunications assets in Europe and Russia and was partly
funded by investor George Soros.
Mr. Schriesheim said he was attracted to Sears because he would
get to work in a transformational environment. "A plain-vanilla
type of role was kind of less appealing to me," he said. I'd
probably add less value to that."
Mr. Schriesheim concedes Sears' results have been less than
stellar. Still, the ability to engineer innovative
asset-reconfiguration activities such as asset sales and rights
offerings has been rewarding and created financial flexibility for
the company, he said.
"People see the Ebita numbers and the decline in same-store
sales and, I suppose, it makes for good sound bites," he said. "Do
I take responsibility for the operating performance? Of course, I'm
the CFO...I'm more focused on, in terms of substance, how we move
the ball forward."
Sears didn't offer a time frame for naming a new CFO. Mr.
Schriesheim will remain in the role until a successor is named and
as an adviser to the company until January 2017.
--Anne Steele contributed to this article.
(END) Dow Jones Newswires
May 27, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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