Cracks in Sears Armor are Starting to Show

Implications: Sears CEO Aylwin Lewis gave a talk to the Orange County chapter of The National Association of Retired Sears Employees Inc. in which he was quoted in their newsletter as confessing for the first time that none of the Sears Grand or Sears Essentials Stores have yet proven to be successful.

He also indicated that Sears is hopeful of finding a way to sell the Martha Stewart line of merchandize which is exclusive to Kmart until their contract expires in 2009.

The newsletter also reported that HALF of the store managers have left the company since the merger on 3/24/05. 

Analysis: If this newsletter report of Mr. Lewis' comments can be believed, this is the first admission that Mr. Lampert's "genius" does not extend to the retail sector!

Let me also remind my readers that many of these Sears Grand and Sears Essentials stores are the same locations that were acquired from Kmart at a large premium in price. It should be no surprise that unsuccessful Kmarts do not necessarily make successful Sears locations especially when they have to overpay to get them in the first place!

The combination of admissions by Mr. Lewis amounts to a powerful indictment of Mr. Lampert's misguided efforts to demonstrate his management skills. They paint a picture of a retailer in far more trouble than has heretofore been allowed to leak out.

With 1/2 their experienced managers gone, none of their highly touted new off mall concepts working and one of their most popular lines of merchandize being phased out by Martha who is switching her allegiance to Federated, even the most devout believers in Mr. Lampert's " Midas Touch" have got to be scratching their heads.