NEW YORK (AP) — Shares of Sears Holdings Corp. fell Tuesday, a day after the retailer announced that chairman and hedge fund billionaire Edward Lampert will take over the role of CEO.
The investor queasiness came even as the Hoffman Estates, Ill.-based company offered an update on holiday sales that showed some improvements at its Sears stores. Overall, the company still faces a long, uphill battle to turn itself around.
Lampert succeeds Louis D'Ambrosio, who is leaving in February because of family health matters. D'Ambrosio will remain on the board until the company's annual meeting in May. He was named CEO in February 2011, ending a three-year search.
Lampert has been known as a hands-on chairman at the operator of Sears and Kmart. The change formalizes that role at a time when the retailer is struggling with sales declines and losses.
"At the end of the day, there is only one person who makes the big decisions ... and that person is Mr. Lampert," wrote Gary Balter, an analyst at Credit Suisse, in a report. "Giving him an additional title does not change that reality, and in our opinion, does not change the direction of the company."
In a statement, Lampert said that he plans to continue to build on the steps outlined last year to get the company back on track.
"I have agreed to assume these additional responsibilities in order to continue the company's recovery and sustain the momentum we are experiencing," said Lampert, the company's largest shareholder. "Working closely with the board, management and our dedicated associates, we will remain focused on executing our goals, improving operations and building sustainable long-term value for shareholders."
In an interview with The Associated Press on Tuesday, D'Ambrosio said that he and Lampert had a "great partnership." ''I believe the transition will be smooth and seamless," he added.
Lampert has a tough road ahead. He engineered the combination of Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.
The company has posted six straight years of declines in revenue at stores opened at least a year. While Sears' middle-income shoppers has been hit hard by the economy's woes, critics have long said the company hasn't done enough to invest in its stores to compete with Wal-Mart Stores Inc., Target Corp. and other competitors.
Last year, Sears announced plans to restore profitability by aggressively cutting costs, reducing inventory, selling off some assets and spinning off others. The company has reduced net debt by $400 million and generated $1.8 billion of cash from the asset sales this fiscal year.
Under D'Ambrosio, who spent 16 years at IBM Corp., Sears has been making changes in its stores. They include giving sales staff almost 15,000 iPads and iPod Touch devices so they can research products and help customers check out wherever they are in a store. It's also improving displays and adding more high-tech washing machines and other appliances. The company is also focusing on a loyalty program, which now accounts for more than half of the company's revenue.
Such changes have helped the business, but analysts say much more needs to be done.
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