How many times does Wall Street have to spell it out? Sears Holdings Corp. (SHLD) is a dying retailer, and its long-time CEO and major shareholder Eddie Lampert isn't helping matters.
Sears continues to notch mind-blowing losses, hemorrhage precious cash and is expected to report its third-straight double-digit decline in same-store sales in the holiday quarter. A disturbing holiday season would come even as the U.S. economy is humming again, which has sent people off to buy appliances at Sears rival Home Depot (HD) .
The mood on Wall Street around Sears prior to the holidays has been glum. And rightfully so.
In a filing earlier this month, Sears disclosed that it had borrowed another $60 million from affiliates of Lampert. The company had already blown through a loan of $100 million that Lampert said he and his cohorts would offer Sears in October.
That otherworldly hunger for cash is a signal that Sears is a sputtering car headed into the holidays that is likely to run out of gas in 2018. The operations look to be in such severe shape, that Lampert's promised $1 billion in cost cuts appear to not be working (or are not being executed upon). What's odd is that cash hasn't been preserved to any tangible degree while Sears pretty much vanishes from America's suburban scene.
So far this year, more than 350 Sears and Kmart stores have been shuttered, according to Fung Global Retail & Technology's store closure tracker. Earlier this month, Sears announced it would close an additional 63 stores after the holidays. More store closures are inevitable after Sears finishes up what's looking like a terrible holiday season. Perhaps this millennial will finally visit one for the first time to scoop up a great store closing deal. Although watching TheStreet's Brian Sozzi navigate a Sears on Black Friday (see enclosed Periscope) doesn't get us too excited about the visit.
Sears on #BlackFriday -- why bother? https://t.co/AIby2Ey1N9
— Brian Sozzi (@BrianSozzi) November 24, 2017
Meanwhile, Lampert keeps on refusing to communicate with Wall Street on quarterly earnings calls. Sears simply offers up a pre-recorded call led by its CFO. Lampert does offer a blanket statement on earnings press releases that are nothing more than thinly veiled public relations fluff. Thanks for making the time, Ed.
Instead of talking with Wall Street analysts this year, Lampert has opted to go straight to the media haters. He said in May that the "irresponsible" media are dragging Sears down and never give him a shot, "singling out" Sears. So it's the media's fault that Sears has reported a per-share loss every quarter for the last 14? And that the merger of Sears and Kmart that the hedgie Lampert put together in 2004 has been an absolute failure? Umm, no.
Now we'll be the first to admit that being a predominant mall-based retailer is no cakewalk right now. The industry has come under intense pressure from eCommerce retailers such as Amazon (AMZN) . Specifically for Kmart, the discounter has been under siege from a price war between Walmart (WMT) , Target (TGT) and Dollar Tree (DLTR) (thanks, Amazon).
Eddie Lampert, BusinessWeek cover in 2004 (yes, this is real).
But many of Sears' retail rivals have enjoyed a mild-mannered comeback lately while Lampert continues to steer the burning Sears ship onto a rocky shore. And why shouldn't they rebound? The stock market is reaching new highs, consumer confidence is way up, discretionary spending is strong and new retail leaders are driving reinventions.
Walmart (WMT) shares touched fresh highs this month on the back of CEO Doug McMillion's rebirth.
"Walmart is changing, and we are trying to accelerate the pace of that change," McMillon told TheStreet's Sozzi when asked what investors -- who have sent shares up 41% this year to a record -- might be seeing in the company. "People might be recognizing that the change is actually happening on top of some assets that are really valuable." Can Lampert lay claim to that? No way. And because of it, former Kmart shoppers are now buying food at a Walmart supercenter.
Or take a look at electronics retailer Best Buy Co. Inc. (BBY) . Best Buy shares reached a record price this year, too, as CEO Hubert Joly has improved online operations and the look of the company's hulking stores. Best Buy has gotten its fair share of business once reserved to Sears' appliance and electronics departments.
Even mall-based teen apparel retailer Abercrombie & Fitch (ANF) -- long left for dead by Wall Street -- is being reborn under new CEO Fran Horowitz. She sounded upbeat in this pre-holiday interview with Sozzi.
Barring a Christmas miracle for Sears personally delivered by Santa to Lampert's house, it's time for Wall Street to pick out the casket for Sears that will go in the grave that it has already dug. Sears stock price over the last five years: down a startling 88%. There is nothing merry about that.
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