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What's Sears Up To?

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In today's Chicago Tribune, a story looks at Sears' ever changing strategy. Is Edward Lampert thinking excess space? The company apparently is adding staff to its real estate division. The company has 200 million square feet of space. That's a lot to try and backfill if that's what Lampert's thinking. Seems like Sears should have tried to move this real estate a few years ago if that's what it is up to.

Sears Holdings Corp. Chairman Edward Lampert regularly takes heat from investors for failing to articulate a strategy. And once again at the company's annual meeting -- the only time he speaks publicly to investors -- he provided little insight into Sears' direction.

But he had plenty of ideas on how to keep Sears going through the toughest retail downturn in decades.

The billionaire investor and majority Sears stakeholder is concentrating these days on how to make about 200 million square feet of retail real estate space "more productive," he told shareholders Monday. He has been adding jobs in Sears' real estate department, while cutting hundreds of jobs elsewhere, in hopes of finding tenants to lease space inside the retailer's stores. He also has reorganized the company so each store is held accountable for the categories it sells and the profits it makes. And he is testing an initiative in which massive stores are transformed into drive-up warehouses.

While the steps don't add up to a strategy, it may not matter in these economic times, said retail consultant Neil Stern.

"The one real advantage Sears has right now is in the downturn, when it is all about cost-cutting, expense control and inventory management, these are things Lampert is really good at," said Stern, a partner at McMillan Doolittle in Chicago. "The rest of the retailers are learning these skills, and that's what Sears does very well."

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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