Sears CEO's Hedge Fund Offers to Buy Kenmore Brand for $400M
Eddie Lampert, CEO and majority shareholder of Sears, announced this week that his hedge fund company, ESL Investments, has offered to pay $400 million for the retailer's Kenmore appliances brand. CNBC reports Lampert is prepared to close on the deal in as little as 60 days to 90 days.
"Speed and certainty here are critical," Lampert wrote. "We believe, therefore, that an expedited process is in the best interest of all parties involved." Sears declined to comment on the offer from ESL Investments. The retail chain has been looking to sell off of its mainstay brands as a way to inject revenue into the business. Last year, Sears sold the Craftsman brand of tools to Stanley Black & Decker in deal valued at $900 million.
Total Retail's Take: Sears has been hemorrhaging money since 2010, the last year the retail store was profitable. Since that time sales have plunged nearly 60 percent and the company has lost $11.2 billion. Despite the bleak outlook for a recovery, Lampert remains optimistic about Sears’ future, particularly if it's able to cash in on the sale of some of its more valuable brands. Lampert wrote the following:
"Together, we believe these transactions would contribute to a comprehensive solution to create a viable and healthy Sears and would provide greater value to all stakeholders than would be available in pursuing other alternatives."
While Lampert mentions other alternatives for turning around Sears, specifics aren't elaborated upon. I think a possible bankruptcy filing and reorganization is most likely one of those alternatives.