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Sears appoints new unit executives

Sears Holdings Corp, the owner of Kenmore appliances and the Kmart and Sears retail chains, will appoint executives to run each of its business lines after saying profit may decline for a third straight quarter.

Each unit's performance will have a designated leader and a group of executive advisers to oversee performance, Sears spokesman Chris Brathwaite said on Saturday in an e-mail. He didn't give details on what each division would do.

The company has Lands' End clothing stores and sells Craftsman tools and DieHard batteries at the Sears and Kmart chains.

The decision followed Sears's disclosure last week that fourth-quarter profit may drop by more than 50 percent after US holiday sales fell.

The biggest US department store company has reported declining sales in stores open at least a year every quarter since chairman Edward Lampert combined Kmart and Sears, Roebuck & Co in March 2005.

Sears, which declined 39 percent last year in NASDAQ trading, will give "greater control, authority and autonomy" to the individual businesses, Brathwaite said in the statement.

Since having put the retailer together, Lampert has centralized functions, giving executives responsibilities that stretched across the company.

The retailer, which blamed increased competition and "unfavorable economic conditions" for the drop in fourth-quarter profit, posted declines in the second and third quarters, with third-quarter net income declining 99 percent.

Corwin Yulinsky, executive vice president of customer strategy, and senior vice president Dev Mukherjee briefed executives on the plans on Thursday, the Wall Street Journal said on Saturday.

Lampert, 45, has tried to lure customers by extending products over the whole organization, adding Lands' End clothing to Sears stores and Craftsman tools at Kmart.

He boosted technology investments and introduced advertising campaigns this year for both chains while telling shareholders at the company's annual meeting in May that fixing retail was "a priority."

Some analysts say he has underinvested in the stores for too long.

"Once people decide they're not going to shop there anymore, it's hard to get them to come back," Jon Fisher, a portfolio manager with Fifth Third Asset Management, said on Jan. 14.

His firm manages US$22 billion in assets, including Sears stock.

The retailer has also lost a senior executive, chief customer officer John Walden, who is no longer with the company after a year at Hoffman Estates, Illinois-based Sears, Brathwaite said.

Of the seven analysts that cover the 122-year-old Sears, only one has a "buy" recommendation, while four advocate selling the shares, data compiled by Bloomberg showed.

The remainder advise holding the stock.

Lampert's ESL Investments Inc bought Kmart debt during the discount chain's bankruptcy and became its largest shareholder after the retailer's emergence from court protection in May 2003.

Lampert engineered Kmart's US$12.3 billion acquisition of Sears, Roebuck less than three years later to form Sears Holding Corp. His funds hold 48 percent of the company, Bloomberg data showed.
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