Sears Holdings says its breakup with the Kardashian family was mutual, part of the retailer's shift toward private-label brands and clothing that's more responsive to fashion trends.
The company will be discontinuing the Kardashian Kollection clothing line, which had been sold by the chain since 2011, according to David Pastrana, chief of staff at Sears. TMZ reported earlier this week that the reality-TV stars had abandoned Sears because they feared for the money-losing retailer's future, saying it wasn't stable.
Sears CEO Edward Lampert has been closing stores and selling hundreds of locations to a real estate investment trust, aiming to generate more cash from the company's extensive property holdings.
With the Kardashian line out of the picture, Sears can elevate more of its private-label brands and adjust the size of its clothing selection based on what individual stores need, the company said.
Lampert is focusing the chain on Shop Your Way rewards program members, who already account for almost three-fourths of its sales. The CEO, who spoke at Sears's annual meeting on Wednesday, also is trying to bolster the company's management ranks in preparation for eventual succession.
"I've been trying to deepen our executive talent, and this is not something I'd say I'm going to be doing forever," he said. "If there's time for a change, there'll be a change. Right now, I'm running the company."
Real estate plan
Mr. Lampert, who is also the retailer's chairman and largest shareholder, created the current version of Sears when he merged it with Kmart a decade ago. He took the CEO job in 2013 after a string of previous leaders failed to pull the company out of a slump. Though Sears continues to lose money and market share, Mr. Lampert has placated investors by selling assets and creating the REIT. The company also has added features like expedited in-store pickup for online orders.
"Most of the things we're doing I'm very excited about," he told the audience at the company's headquarters in Hoffman Estates, Illinois.
Sears estimates that it will get $2.5 billion in proceeds from its REIT plan, which involves placing 254 stores in the trust. On Wednesday, Mr. Lampert said Sears will use proceeds from the REIT to pay down debt and pension obligations, as well as reassure suppliers nervous about the retailer's ability to pay its bills. Sears has lost $7.1 billion in the last four fiscal years, including $1.7 billion last year.
Mr. Lampert also has been shedding assets like the Lands' End clothing brand, which spun off in 2014. And he's slimming down the company's store base, partially by selling and subleasing space to other retailers and mall operators.
Those moves generated $2.4 billion of liquidity last year, Mr. Lampert said in a blog post Wednesday, "allowing us to fund our company's transformation much faster. This year, we believe we can derive even more value than we did last year."
Mr. Lampert said one of his regrets is that Sears hasn't had the money to make desired changes fast enough.
"While operational performance has been the cause of some of that, pension expenses, the recession and other factors have impacted us as well," he said.
~ Bloomberg News ~