Sears to Reorganize and Then What?
Edward Lampert has failed to turn Sears and Kmart around and perhaps he’s begun to recognize that. That would be one explanation for why he’s about to undertake a reorganization of Sears Holdings that would divide the company into several operating units and presumably make it easier to sell off assets.
The plan, according to a number of reports, is for the company to set up independent units to manage its real estate holdings, proprietary brands such as Craftsman, Diehard and Kenmore, and online businesses.
Sears issued a statement when its plans became public. “We are introducing an organizational structure that provides operating businesses with greater control, authority and autonomy. Each operating business unit will have a designated leader and an advisory group comprised of senior Sears Holdings executives to provide direction and oversee the business unit’s performance.”
What isn’t clear at the present time is what will happen to the Kmart and Sears retail businesses. It does appear from the initial information leaked out that moves could further compromise the chains’ already weak competitive position by selling its brands to other retailers.
Mr. Lampert, according to an anonymous source quoted in The Wall Street Journal, is “trying to find a different way to manage the company where he can be involved in a more effective manner. The previous structure wasn’t working.”
Discussion Question: What do you expect to happen as a result of Sears Holdings reorganizing its businesses?
- Flagging Sears Plans Shakeup ?In Latest Bid at Turnaround – The Wall Street Journal
- Sears to shift to independently run units – Chicago Tribune
- Sears Holdings to Appoint Leaders for Each Business Unit – Bloomberg