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Eddie Lampert: The Billionaire On His 9th Retail Life

What’s your end game, Eddie?

That’s the question everyone’s been asking, literally from day one.

Back in November 2004, at an analyst/press conference where hedge fund titan Edward Lampert announced the merger of Sears and Kmart, the late, great TWICE associate Brent Felgner asked him point blank: How does linking two fading retail chains strengthen either one?

Lampert responded at length, citing synergies, economies of scale and cost savings, but Brent, along with other business journalists and most of Wall Street, was unconvinced.

Flash forward 11 years and Sears Holdings remains a hard sell.

Lampert, who took the reins himself as CEO in 2013, has since shifted to an integrated, multichannel focus that downplays the role of retail real estate. The latter, as with Sears Canada, Land’s End, its appliance and hardware specialty chains, and seemingly anything else that isn’t nailed down, is being shed, through sales, sub-leases and this year, a publicly-traded real estate investment trust.

The REIT injected $2.7 billion into company coffers, which gave Lampert his first quarterly profit as CEO.

But the celebration was short lived: During its last full quarter, ending on Halloween, Sears Holdings reported a $454 million loss and a 20 percent slide in net sales, with high single-digit comp declines at Kmart and Sears.

Among industry observers, the talk is no longer if Sears can survive, but when it will fail, and who will pick up the market-share pieces. As one retail analyst described it, Lampert is burning the furniture to heat the house, and at some point he’ll run out of wood.

While Sears’ future seems dim, Lampert has been in worse binds and survived. In 2003 he was kidnapped and held for ransom with a shotgun at his head, and released two days later with the promise to his captors of a $5 million payout.

Unfortunately, shareholders and creditors are less gullible.