Is Eddie Lampert Taking Sears Holdings Private?
When you’re an ailing publicly-traded retailer and just about everything written or said about your company goes through a laundry list of mistakes you made and fixes you need to make to get your business turned around, what do you do? If you’re Sears Holdings, apparently, you take the company private. (At least that’s the rumor du jour.)
Sears Holdings has seen its stock price rise on speculation that the company’s chairman, Edward Lampert, was getting ready to go private. Analysts, even those who saw some value in going private, said that would not be enough.
Morningstar analyst Paul Swinand told Reuters, "They still have to improve the operating structure and costs, pension, etc., then reinvest in stores, and then get appliances to sell again."
The speculation about what Sears Holdings might do next comes after recent reports that lenders are looking to negotiate quicker turnaround on payments from the company. One lender, CIT Group, made the decision to stop financing factors for suppliers waiting on payment from Sears Holdings for orders delivered to the company.
- Sears stock rises on speculation it may go private – Reuters
- Sears Rises on Speculation Lampert May Take Retailer Private – Bloomberg News
- Sears Seeks to Calm Nerves – The Wall Street Journal
- Sears shares fall after financer halts supplier loans – Reuters
Discussion Questions: Would Sears be smart to go private at this time? What would it be able to do as a private concern that it wouldn’t as a publicly-trade company?