Below is a link to the 2014 Sears Holdings Chairman’s Letter written by Edward Lampert.  I always find Eddie’s insight to be extremely valuable despite the obvious struggles that he has had in improving the financial results of Sears Holding.  The biggest critique I have of Eddie is not offloading more real estate and shutting down stores earlier in the process, as opposed to most analysts’ critiques that the company has under-invested in store fixtures and furnishings.  Sears is an extremely controversial stock on Wall Street where most analysts seem to value the company as simply a retailer, while other value investors such as Lampert, Bruce Berkowitz and myself see the company as more of a collection of valuable assets.  On this basis, the stock is exceptionally inexpensive and offers the potential for very strong returns.  The fact is however, that Sears retail operations are destroying significant shareholder value, so the sooner that Eddie can stop the bleeding and return to positive EBITDA numbers, the greater the potential returns for investors will obviously be.

 

Chairman’s Letter (February 27, 2014)