New CEO for Sears; More Expanded Role for Lampert
Chicago, Sears Holdings Corp. named Aylwin Lewis to replace Alan Lacy as chief executive and president. Lacy, who headed Sears, Roebuck and Co. from 2000 until its March acquisition by Kmart, will continue to serve as vice chairman and a director. Lewis, whose appointment is effective Sept. 30, is president of Sears Holdings. He previously had been CEO of Kmart. At the same time, hedge-fund wizard Edward Lampert, who engineered the merger and is the chairman of the combined company, is taking a more hands-on role. He will direct the marketing, merchandising and on-line businesses of Sears Holdings and its Lands’ End unit.
“Alan, Aylwin and I believe these changes will achieve greater clarity in our operating management and align this corporate structure with our vision of Sears Holdings,” said Lampert. “Our goal is to build one company with multiple ways of connecting with our customers, including our various store formats, on-line offerings, service relationships and credit products.”
During his tenure, Lacy overhauled the layout and inventory of Sears’ full-line stores, bought the Lands’ End specialty catalog and sold the credit division to Citigroup. But he was unable to stem Sears’ long-term sales slump.
The announcement concerning the shake-up at the top was announced along with Sears’ second-quarter results. The chain said second-quarter net profit rose to $161 million, or 98? a share, from $154 million, or $1.54 a share, a year ago. Earnings were impacted because of a large increase in shares outstanding associated with the merger, which was completed in May.
Total revenue rose to $13.192 billion from $4.797 billion last year, due primarily to the addition of Sears, Roebuck revenue of $8.6 billion. Kmart’s same-store sales decreased 0.3%. Sears’ same-store sales declined 7.4%.
The company said about 20 Sears and Kmart stores and facilities located in Louisiana and Mississippi were damaged by Hurricane Katrina. It expects the majority of the losses to be covered by insurance.
Feds Approve GameStop, Electronics Boutique Merger
Grapevine, Texas, The Securities and Exchange Commission (SEC) approved the proposed $1.4 billion merger of video-game retailers GameStop Corp. and Electronics Boutique Holdings Corp. The two companies will seek shareholder approval of the merger on Oct. 6.
The merger would give the combined company more than 3,200 stores in the United States and 600 internationally.
Retailers Step Up Hurricane Relief Efforts
New York City, Retailers continued their efforts to lend aid to the victims of Hurricane Katrina. Target Stores announced it would waive fees, payments and finance charges for Target Visa card and Target Red cardholders from the affected areas for the months of September and October. In addition, during those two months, no finance charges or will be assessed and no late charges will be charged.
Target is also reaching out to its employees in the impacted areas. Similar to Wal-Mart Stores, Target is offering positions for employees in the affected areas at any Target store nationwide.
In other developments:
•Rite Aid has sent three mobile pharmacy units to affected areas to provide prescription and pharmacy services. The chain is setting up shelters for its associates in the affected areas. The shelters are equipped with running water, cots for sleeping, cooking areas, portable showers and toilets. The chain is offering transportation to and from the shelters as needed. Thirty-four Rite Aid stores are closed due to the hurricane, the majority in the greater New Orleans area.
•CVS/pharmacy is setting up emergency pharmacy units in impacted areas along the Gulf Coast.
•Federated Department Stores has begun an internal fundraising drive among its more than 240,000 associates nationwide. All employee contributions made to the designated relief organizations will be matched on a dollar-for-dollar basis. The company is also matching customer donations. Federated is offering food, water and other transitional assistance to its 500 employees in the affected areas. It is responding to requests from employees for immediate assistance, based on need.
•From Sept. 11-14, Kohl’s stores nationwide will collect gently used clothes and shoes for Kids in Distressed Situations (K.I.D.S.), a national charity that delivers apparel to disadvantaged children. All of the clothing contributions will be used to assist in hurricane relief efforts. As an added incentive, every donor will receive a coupon worth 15% off their next purchase at Kohl’s.