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Executives said Thursday they were also looking into selling the retailer’s Kenmore brand of appliances — one of the few bright spots in the company’s performance — to Lampert’s hedge fund. Lampert, the company’s largest shareholder, has also become one of its biggest lenders. Last year his hedge fund, ESL Investments, doled out $1 billion in financial support to the ailing retailer.
The arrangements between Sears and Lampert’s businesses — which also include Seritage Growth Properties, a real estate investment trust that in some cases has effectively become Sears’s landlord — have raised concerns among shareholders. Last year, Lampert and Sears’s board of directors paid $40 million to settle a lawsuit alleging that Lampert had tried to siphon off the company’s best real estate by selling it to Seritage. Sears shareholders argued that the “highly conflicted transaction” would probably “plunge the company into insolvency.”
Sears currently has $5.2 billion in debt, up from $4.2 billion a year ago.
The sale of Kenmore would be part of a broader effort by Sears to sell off its successful brands. The retailer sold its Craftsman line to Stanley Black & Decker for $900 million last year.
Earlier this month, Sears said it would begin selling tires on Amazon.com, where it already sells its Kenmore line of appliances, giving consumers yet another reason to avoid its stores. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
“This company is on life support,” said Sucharita Kodali, a retail analyst for research firm Forrester. “I don’t think anyone — whether a competitor, supplier or landlord — thinks otherwise. It will not be a shock to anyone when it finally does shut down.”
