Sears’ Lampert hits back at ‘inaccurate’ report
In a letter to Barron’s, Sears Holdings Corp Chairman Edward Lampert defended the retailer from what he called an inaccurate and biased report in the August 24 edition of the paper.
The billionaire was responding to a report that suggested Sears stock could fall 50 percent after extreme cost-cutting depleted its ability to generate cash flow needed to win back market share from rivals.
“The article exaggerates the extent of our cost-cutting in an attempt to make it appear that what we are doing is somehow extreme or unproductive,” Lampert said, adding Sears is prioritizing spending and “reducing and reallocating certain expenses that those who are more conventionally focused might disagree with.”
The chairman also defended an amended credit deal, an amended partnership agreement related to his hedge fund ESL Investment Inc, as well as possible store closings, which he said will generate cash and eliminate ongoing losses from operations flexcheck cash advance.
The article was “misleading, inaccurate and poorly researched,” Lampert said in the letter, published in Barron’s September 7 edition, which also defended Sears’ quarterly reporting of “special charges” and “adjusted earnings before interest taxes, depreciation and amortization,” or EBITDA.
Jonathan Laing, who wrote the article, said in a reply on the same page that free cash flow is the best measure of the company’s performance, on which score “Sears is losing ground.”
Sears shares are down 15.4 percent since the company reported a surprise quarterly loss on August 20, which dampened hopes Lampert could turn the company around. The shares closed at $62.38 on Friday.
(Reporting by Jonathan Spicer; Editing by Marguerita Choy)