Sears CEO resigns amid firm turmoil
Published: Tuesday, January 29, 2008 at 6:01 a.m.
Last Modified: Monday, January 28, 2008 at 8:14 p.m.
CHICAGO - Sears Holdings Corp. abruptly announced the departure of president and chief executive Aylwin B. Lewis on Monday, leaving a management void at the top of the department store chain controlled by Chairman Edward S. Lampert as it tries a high-stakes restructuring to reconnect with customers and reinvigorate slumping sales.
Lewis was an executive at fast-food chain Yum Brands Inc. and had little retail experience when he was hand-picked by Lampert in 2004 to run Kmart and later Sears. W. Bruce Johnson was named as interim CEO while the company looks for a permanent successor.
Monday's announcement marked the latest chapter for the venerable retailer, which has seen its competitors snatch away customers since Lampert acquired Kmart in 2003 and Sears, Roebuck and Co. in 2005.
At the time, Lampert - a masterful hedge fund investor who controls all major decisions made at Sears Holdings - promised to reinvigorate the faded retail icons and "transform them into a great company.''
Nearly three years later, Lampert's task has proven difficult, if not downright impossible, as the company's 3,800 stores fail to attract many customers.
"He certainly has his work cut out for him,'' said Morningstar analyst Kim Picciola. "Even the total organizational change is an indicator that it was a much greater challenge than what they realized.''
For the first three quarters of the year, Sears' profit has fallen more than 40 percent. And earlier this month the company said it managed to post third-quarter earnings of just $2 million - down 99 percent from last year.
Adding to investors' frustrations, was a warning that Sears would likely post fourth-quarter earnings well below Wall Street forecasts as eroding sales push its profit down as much as 57 percent.
The string of bad news prompted Lampert, whose ESL Investments Inc. owns 42 percent of Sears' common stock, to announce a reorganization for the Hoffman Estates-based company last week, structuring the company into five types of units: operating businesses, support businesses, brands, online and real estate.
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