The company's normalized earnings power can be meaningfully higher as the home appliance and hardware markets improve.
The company has significant assets in real estate. Those assets can be leveraged through sale lease-backs, retail partnerships, and as distribution and service centers in conjunction with Internet sales.
Sears has been a leader in online retail, and as part of a portfolio of assets including brands and stores, it will become a leaner and asset-light retail as legacy assets are sold or separated. Read more
Sears can't shrink its way to profitability. Sales keep declining as fast or faster than management can cut costs and reduce inventory. Store closings will not be enough.
Competition is intense and will continue to affect the hardgoods business. Home Depot and Lowe's will continue to take share in hardware and appliances. Target and Wal-Mart will continue to pressure Kmart.
Sears lacks a point of difference in its merchandise that is not one of its prize brands. This is particularly true in Kmart, where appliances and tools will never be as important as at Sears. Read more
Management changes at Sears are hard to keep up with, including another CEO transition in 2012 and a CFO departure the year before. It is clear that with roughly 60% equity ownership and additional participation in investments such as commercial paper Read more
Formed in 2005 after merging with Kmart following that company's Chapter 11 reorganization, Sears Holdings Corporation is parent to Sears, Sears Canada, and Kmart stores Read more