When Will They Learn

Implications: Mr. Lance Crain, a very influential and knowledgeable business pundit, believes the answer to Mr. Lampert's problems is to sell Sears real estate and use the money to turn around Kmart with all Sears brands. He obviously has not done his homework. As readers of the GLG analysis on the topic of SHLD have long ago realized, there simply is no way to monetize the Sears stores in malls which are governed by REAs and Operating agreements that severely limit their use and terms of sale.

Analysis: Mr. Lance Crain, President and editorial director of Crain Communications, in a well reasoned but poorly researched editorial, argues for a new way to think about adding value to SHLD's stock price.

He suggest closing Sears and selling the real estate in order to rebuild the Kmart stores back to their original glory using all the best known Sears brands.

In addition to being one of the weirder ideas to come along in many years and one that no knowledgeable retailer would ever seriously consider for a wide variety of reasons, his suggestion has one huge fatal flaw: Sears stores in malls have little if any value and what value they do have would take years to realize!

Where was Mr. Crain when many of the major analysts who followed SHLD all recently came to the same conclusion that GLG readers have known about for over two years? The conclusion they all came to (although each for their own misguided reasons,) was that Sears real estate had little if any real value.

In fact as I have repeatedly warned, the problems involved in monetizing Sears stores are so great that one could argue that as a totality, the Sears stores might turn out to have a negative value.

If any GLG readers need further evidence of Mr. Crain's "fatal flaw" in his recommendation, they need only contact the writer.