S
Sarcastic American!
Guest
Yup, when you give tax breaks to rich pigs, the only thing that
trickles down is piss, don'tchaknow?
WEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!
HERB GREENBERG
Worst CEO award goes to Sears' Lampert
Commentary: 2007 was the toughest year yet to pick a 'winner'
By Herb Greenberg, MarketWatch
Last update: 12:01 a.m. EST Dec. 6, 2007Print E-mail RSS Disable Live
Quotes
SAN DIEGO (MarketWatch) -- The winner of this year's Worst CEO of the
Year, awarded annually by this column, isn't a CEO at all, but might
as well be: Sears Holdings (SHLD:sears hldgs corp com
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Last: 115.07+3.29+2.94%
4:00pm 12/07/2007
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Sponsored by:
115.07, +3.29, +2.9%) Chairman Eddie Lampert, who is highly regarded
by many on Wall Street for delivering a steady stream of super-sized
returns as head of ESL Investments.
If it's any consolation, Lampert didn't win by a landslide. There were
simply so many excellent contenders and reader nominations that it was
hard to choose.
Some, like Chuck Prince, formerly of Citigroup (C:Citigroup, Inc
News, chart, profile, more
Last: 34.31-0.04-0.12%
4:00pm 12/07/2007
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Sponsored by:
34.31, -0.04, -0.1%) , and Ed Zander (MOT:Motorola, Inc
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Last: 16.30-0.01-0.06%
4:00pm 12/07/2007
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Sponsored by:
16.30, -0.01, -0.1%) , of Motorola, are out of their jobs, which
takes them out of the running. Also on the list until Wednesday was
Peter van Stolk of Jones Soda (JSDA:jones soda co com
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Last: 6.30-0.30-4.55%
4:00pm 12/07/2007
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Sponsored by:
6.30, -0.30, -4.5%) , an entrepreneur who appeared to be in well over
his head as his company attempts a transition to the big time.
However, like Zander, he has agreed to leave his job by year-end.
Then there are those like Angelo Mozilo of Countrywide Financial
(CFC:Countrywide Financial Corp
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Last: 11.54-0.56-4.63%
4:01pm 12/07/2007
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Sponsored by:
11.54, -0.56, -4.6%) , the most obvious choice to many readers. By
his company's sheer size, he has become the poster child for a
mortgage market gone wild.
However, aside from ill-timed stock sales as his company was buying
back stock, which if nothing else looked bad and Countrywide's
aggressive push into subprime loans at the wrong time it's hard to
single out Mozilo.
Why, for example, shouldn't it be Kerry Killinger of Washington Mutual
(WM:Washington Mutual Inc
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Last: 19.03-0.10-0.52%
4:00pm 12/07/2007
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Sponsored by:
19.03, -0.10, -0.5%) , whose company is loaded with subprime, option
arms and home equity lines and loans in some of the hardest-hit
housing hotspots? Or Jimmy Cayne of Bear Stearns (BSC:The Bear Stearns
Companies Inc
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Last: 100.94+2.73+2.78%
4:00pm 12/07/2007
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Sponsored by:
100.94, +2.73, +2.8%) , whose firm took on more than a few bad
mortgage-related investments? Or Scott Hartman, of subprime lender
NovaStar (NFI:novastar finl inc com new
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Last: 2.81-0.27-8.77%
4:04pm 12/07/2007
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Sponsored by:
2.81, -0.27, -8.8%) , whose company is about to be booted off the New
York Stock Exchange to the bulletin board while on life support?
Away from financial services, Mesa Air's (MESA:Mesa Air Group Inc
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Last: 3.84+0.23+6.37%
4:00pm 12/07/2007
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Sponsored by:
3.84, +0.23, +6.4%) Jonathan Ornstein received the most write-in
votes by employees, investors and employees of competitors. (It was an
impressive, concerted campaign.) Not only does the company suffer the
lowest margins and boast the worst-performing stock among regional
airlines, with "skyrocketing" pilot attrition (per an Air Line Pilots
Association press release), but it recently was embarrassed after a
judge ruled that Mesa must pay $80 million to Hawaiian Air for using
confidential, proprietary information to start its inter-island
Hawaiian competitor, "go!" (Mesa says it plans to appeal.)
Others on the list include: Phil Schoonover of Circuit City
(CC:Circuit City Stores, Inc.- Circuit City Group
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Last: 7.76+0.34+4.58%
4:05pm 12/07/2007
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Sponsored by:
7.76, +0.34, +4.6%) , whose stock is down nearly 70% this year as he
tries to turn the company around; so far, financial results suggest
the turnaround isn't working as several top executives, including one
who was recently promoted, have fled; Jim Tobin of Boston Scientific
(BSX:Boston Scientific Corporation
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Last: 12.73-0.26-2.00%
4:01pm 12/07/2007
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Sponsored by:
12.73, -0.26, -2.0%) back for a second year as his company and stock
continue to reel from its Guidant acquisition several years ago; Pat
Russo of Alcatel-Lucent (ALU:alcatel-lucent sponsored adr
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Last: 8.08+0.23+2.93%
4:02pm 12/07/2007
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Sponsored by:
8.08, +0.23, +2.9%) , whose dismal stock performance is a throwback
to the pre-merger Lucent; Daryl Brewster of Krispy Kreme (KKD:krispy
kreme doughnuts inc com
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Last: 3.47+0.23+7.10%
4:04pm 12/07/2007
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Sponsored by:
3.47, +0.23, +7.1%) , who seems to be dreaming the impossible sugar-
coated dream, and (last but not least) Overstock.com's (OSTK
verstock
com inc del com
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Last: 23.84+0.10+0.42%
4:00pm 12/07/2007
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Sponsored by:
23.84, +0.10, +0.4%) Patrick Byrne back for his third consecutive
year - as his company continues to struggle (despite a remarkably
resilient stock.)
Then there's Lampert, who pre-Sears and Kmart could have won
"investment manager of the year" many times over. This award is
nothing personal. I'm among those who thought ESL's purchase of
Citigroup shares earlier this year was a no-brainer. But Sears has put
him in a position to be judged differently.
Last week, after Sears reported yet another dismal quarter, I
suggested in my blog that maybe the worst CEO should be Sears CEO
Aylwin Lewis, whose concedes quarter after quarter that the company
needs to do a better job. "To be fair," commented hedge fund manager
Jeff Matthews of Ram Partners, "he doesn't have much to work with."
Matthews was right. While it's technically Lewis' show, how can he
turn around the company, as CEO, when the capital decisions aren't
his? (Answer: He can't.) Sears Eddie Lampert, whose quarterly letters
to shareholders, which turned annual last March, reflect vision for
the company.
My skepticism of the Sears turnaround is nothing new and, truth be
told, I was a skeptic of the JCPenney (JCPenney (J.C.) Company, Inc
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Sponsored by:
47.92, +3.08, +6.9%) , turnaround, as well. (And wrong, I might add.)
The difference is that Penney was being run by a skilled merchant who
had turned around multiple retailers. It has since become place where
middle America shops. By contrast, Sears is being run by Lampert and
Lewis - a hedge fund operator and former executive of YUM! Brands
(YUM:yum brands inc com
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Last: 39.48+0.43+1.10%
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Sponsored by:
39.48, +0.43, +1.1%) , which is restaurants, not pure retail
certainly not retail in the vein of Sears.
Lampert's mantra has been profits over sales, which makes sense if it
works. As recently as March, in his shareholder letter, he suggested
better times were imminent when he said, "We believe we have
stabilized Kmart's Ebitda and are now in a position to grow from that
base." But retailers, especially those trying to improve themselves,
require considerable capital infusions to drive sales.
So far, for all of Sears, including Kmart, the strategy has failed
miserably. Not only have same-store sales (which Lampert says are
"overrated" as a metric) gone deeper into the red, but gross margins,
Ebitda and operating income for Kmart are also going in the wrong
direction.
While all of this is going on, from out of the blue Sears emerged as a
bidder to buy Restoration Hardware (RSTO:restoration hardware inc del
com
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Last: 7.06-0.09-1.26%
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Sponsored by:
7.06, -0.09, -1.3%) , which despite long-time efforts to turn itself
around remains a troubled retailer. Investors, meanwhile, keep talking
about Sears, somehow as an asset play. Maybe one day it will be, but
until then it's still largely a retailer. On that score, it's doing so
poorly that following the most recent earnings, analyst Gary Balter of
Credit Suisse, a long-time fan of the Sears story, told clients,
"Unfortunately, visits to the stores show very little evidence that
Mr. Lampert has figured out the magic sauce that makes good retailers
profitable and we doubt that we will see that in the near and medium
term." Hardly a ringing endorsement.
The silver lining, if you can call it that, is that unlike all prior
winners all of whom are no longer in their jobs job security at Sears
is the last thing Lampert has to worry about.
Herb Greenberg is senior columnist for MarketWatch and contributor to
CNBC television based in San Diego. He does not own stocks (except for
shares of his employer), and he does not sell individual stocks short
or invest in hedge funds.
Companies in this story Sears Hldgs Corp (SHLD)
Citigroup, Inc (C)
Circuit City Stores, Inc.- Circuit City Group (CC)
Alcatel-Lucent (ALU)
Yum Brands Inc (YUM)
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28 Comments (view all)
I cannot believe that Steve Jobs is not one of the best CEOs of the
year.... Jobs is heaidng a company which is in one of the most
competitive businesses in the world. More than anything else he has
delivered just what he promised with blockbuster...
- ind4evr
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by RussellUpsomgrubb 2 days ago
The original intention of the K-Mart Sears merger, as I recall it
being stated at the time, was that the combination of stores and
brands would allow the new corporation to be able to compete on a
scale with Wal-Mart, as they would get better deals from wholesale
distributors by buying in greater bulk, as stated in this November 17,
2004 consumeraffairs.com story:
The merger isn't the end of problems for Kmart and Sears, both
struggling to combat Wal-Mart, Home Depot and other powerhouse
retailers. But the combined company will have greater buying power and
more outlets -- 2,350 Sears and Kmart locations and another 1,100
specialty stores.
"The merger will enable us to manage the businesses of Sears and Kmart
to produce a higher return than either company could achieve on its
own," Lampert said in a statement.
Your argument that Lampert plans to pare down the retail base only
proves my point; that he basically lied to the employees and investors
about the future of both companies at the time of the merger.
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by angelsprite 2 days ago
Lampert is killing the goose that laid the golden egg. If he wanted
to be like Warren Buffet, he is failing miserably. Buffet would NEVER
kill the goose that laid the golden egg. Never! He would give it
extra nests, lined with linen and silk, and tie a red bow around it's
neck.
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by Hari123 2 days ago
Herb,
Do u even know who u are talking abt. Go do some reasearch and learn
abt Eddie before popping up and writing an article.
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by DeathSpiral 2 days ago
The worst CEO of the year...
....still laughs all the way to the bank!
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by 6TANGO 2 days ago
A COUPLE OF YEARS AGO, HE WAS A HERO, NOW HE IS A BUM, YOU GUYS JUST
NEED TO HAVE SOMETHING TO WRITE ABOUT.
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by NDL 2 days ago
You overlooked Caplan at E Trade. He did some job for them and their
stockholders, n'est-ce pas??
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by AAAAmerican 2 days ago
Sears Holding really has way too many Call Letters SHLD:OTC and there
old Single Charaqcter Call Symbol ((S:NYSE )) which may have portended
what was going to happen..eh...
Single Character Call Symbols were/are like Single DIGIT License
Plates in Rhode Island.
We have and had been long term customers of there stores now with
every other Retailer Beating there Prices near us by about 33-42% why
should we Shop/Buy there and not even be able to find any Staff to
help us?
We have 7 Sears Stores and 9 K-Marts within our State within 12 miles
and not even including NYC etc... yes and think how many other stores
of competitors are here too ..eh...
When we have gone in to purchase our items there is about 8-12
salespeople hanging around in a group doing nothing but running there
mouths..well talking I guess to each other and not even a sales
meeting either... It has taken each time over 45 minutes for even
somone to come over asking "what ya want" very curtly at that.
Does Sears Holding have Customer Service Sales 101 training anymore?
Oh the latest time we have gone we were interested in buying a stove
and I went finally after nobody came over and asked a staff person to
help us who was in a group of nine salespeople. She said it was not
her department and walked away.. Doesnt she work at the store to help
customers?
Well I dont work in there stores...eh...
So I really think not the CEO Mr. Eddie Lampert but ALL THE FIRM
((SHLD:OTC)) should get the Award you bestow!
NOTE
Peronal message to, Mr. Lampert, Chairman and Mr. Alywin Lewis, CEO
ITS THE PRICE and CUSToMER SERVICEs, you need to improve, stupid!
We are the ones which used to buy at your stores and now no more!
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by Erwin.Rommel 2 days ago
HAHA sears is pathetic at best. It deserves to me meshed into oblivion
along with other crappy run stores like K-mart. Good for the CEO - he
is actually doing something productive with the cash produced from
that piece of garbage company. The staff is seriously clueless and
should be instantly liquidated, along with the former drug addicts
that run K-mart. I don't step foot in either of these garbage joints,
If I need something cheap I realize its better to buy higher quality
things at Home Depot or bed bath and beyond than to save more and have
it break easier. Good job Mr. Lampert if I were you start closing
retail stores, take the existing cash flow and invest it in a
profitable security.
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by engineer93 2 days ago
I would like to see how much all of these poor performer CEOs made
this year and if they got fired, how long it took before they were in
charge of another company. I bet the figures would show that they
made just as much money as a good performer and if fired, that they
had a new job in a few months. Does anyone else see the problem here?
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by shooter21 2 days ago
I am STILL waiting for the market to figure out that Eddie Lampert
should be called "fast" Eddie Lampert given his kiting of Kmart stock
with Sears. Let me explain. Fast Eddie sells a few 'good' locations
to Sears for a hefty paper gain. The market says, "Whoa, what if KMRT
gets that price for ALL of its real estate?" KMRT stock soars. Then
low and behold, KMRT buys Sears ("Hey Sears, thanks for the help
getting the stock rolling." is heard coming from KMRT's HQs!) given
their inflated valuation. Combined company is renamed Sears
Holdings. How much real estate (at the prices that started this whole
charade) have been sold since those early days deals to Sears and HD?
Nada. Zip. Zilch. This was a classic 'kiting' scheme that the
market has, so far, fallen for. Brilliant move by Fast Eddie, but how
repeatable?
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by 1liketolaugh 2 days ago
Eddie Lampert is going to do to the retail business what the Hunt
brothers did to the silver market. Speaking of Montgomery Ward, you
can connect the beginning of the end of Sears with Ed Brennan hiring
an outsider to replace him just like his brother Bernie was CEO for
the downfall of Montgomery Ward. Eddie Lampert is a criminal, and it's
time he shares a cell with Dennis from Tyco. He is and has been
cooking the books.
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by 1liketolaugh 2 days ago
And let's not forget, the MONEY Alan Lacy made when we sold Sears down
the river to Eddie. Bristol Meyers might be next, they just put him on
the board. Eddie, are you going for an inside job towards the
pharmacatical industry now?
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by Johnny 2 days ago
Herb you've been a bear on Sears for years, through its rise and its
fall, and probably started when Sears was at the same price is at now,
so you just conviniently look smart right now on it. It is a crappy
retailer, theres obviously no arguement there. But the face of the
matter is that everybody's, including Lamperts, investment thesis in
Sears is its undervalued asset base, which you conviniently overlook
in your article. Lampert is above all a hedge fund manager and if he
cant make the money on the retailing end (which he can't), hes going
to make it by liquidating those undervalued assets. A recent Barrons
article cites a break up value of $300, so why not triple the present
stock price for himself, in the end, Sears stock and shareholders will
win out on it.
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by Erwin.Rommel 2 days ago
Mmm not neccessarily Engineer93 usually your severance package is
based on your length of empoyment. Its wise for CEO's to stay about
5-10 years. Don't forget CEO's are usually temporary vehicles to drive
performance or projects for a set amount of time. For example, Citi
CEO was hired for bad debt securities. As soon as this mess is over
I'm sure they will hire a new CEO.
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by MrCynical 2 days ago
How is former Merrill Lynch CEO Stan O'Neal NOT on the list?
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by Herb.on.the.shortbus 1 day ago
Thank you, thank you, thank you, Herb!
You are the best contrary indicator I am aware of.
Your stellar calls on Fairfax Financial (FFH) were amazing. You were
junking the company down around $100 per share in 2005 and 2006. Now
it trades at $300!
You also were ripping your boy Byrne when Overstock was at $15. Now
Overstock (OSTK) trades above $23 and is up about 50% this year!
Oh yeah, and let's not forget your past history with Eddie. I seem to
recall you going on CNBC 2 years ago and stating your bearish case on
Autozone when the stock was about $85 per share. As I write this, I
see it is trading at $127. That"s another 50% loser for you!
With SHLD, your negative piece on Eddie gives me full confidence to
buy more stock at these levels. Given your past history, this stock
will easily be $200 - $300 over the next year or two, and you will be
wrong again.
Please, Herb, if you knew so much about running a company, you
wouldn't be in the media-- you would actually be running a company!
You have no concept of Eddie and what he is trying to do, and neither
does Erin Burnett, Fortune magazine, Standard & Poors, etc.
What has Eddie done to deserve such wrath from the media? Is it petty
jealousy that he's successful and you're nothing but a news reporter?
Is it because he is seeking to make a run at retailing and trying to
save jobs (particularly at the pathetic Kmart side where 150,000 to
200,000 will be laid off if he shuts it down)? Is it because he
doesn't spoonfeed you quarterly guidance? What is it?
It is not even deserved. Case in point-- combine the numbers of Sears
and Kmart in 2004 before the merger and see that they made roughly
$828 million in net income; even in a terrible retail environment this
year, they are going to make roughly $1 billion in net income.
Another case in point-- how were Home Depot, Lowes, and JC Penney's
same-store sales numbers compared to the Sears numbers in the recent
quarter? Sears was better than HD and LOW, and just a touch below
JCP. Factor out the new stores in JCP's numbers and they are almost
exactly the same. Why doesn't Ullman get the same criticism that
Eddie does? Oh yeah, and lastly, the stock price-- merger went
through at $100 per share; currently trading at $111. I will be the
first to admit that an 11% return over nearly 3 years is not stellar.
However, that is not a disaster like everyone in the media makes it
out to be.
For all your brilliant "analysis," Herb, I would like to give you my
own award: BIGGEST CONTRARY INDICATOR IN THE MARKETS!
Congratulations! Everytime you open your mouth, successful investors
will know to do the OPPOSITE of what you say! As my above concrete
examples indicate (and my screenname implies), investors can easily
beat the market just by betting against the most "intelligence-
challenged" person in the media. I would also ask that you get Cramer
to turn and bail on Eddie-- then we will have full confirmation that
Sears has bottomed.
Thank you once again for calling the bottom in SHLD!
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by 1liketolaugh 1 day ago
Eddie,
Quit having your little interns reply to these boards. Sign your name
like a real man like you did to your stupid letter to your employees.
Somebody call the whambulance, Eddie's a crybaby.
Maybe it's time to get someone to kidnap you again so you can get some
sympathy, I'd call it sympathy for the devil.
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by sbenard 1 day ago
I would have given it to Nardelli. His contempt for stockholders when
he was head of Home Depot deserves the dubious distinction of the
world's worse CEO for the next century. I won't be buying a Chrystler
while he is at the head, even though I have a relative that works
there.
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by BaldEagle 1 day ago
I can't believe Hector Ruiz of AMD wasn't even in the running! He's
reduced AMD to less than the price of their ATI aquisition in just a
year. Most certainly a worth contender for worst CEO of the year.
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by Scottnaye 1 day ago
I think the winners should be the Board of Directors of the companies
that watched their stock price decline while the CEO exited with
millions of dollars in his pocket...
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by tonyabeth 1 day ago
The board of directors were hand picked by Lampert. Not a retail
person on it. All private equity people. And if you want to talk
about Nardelli's contempt, at least he located his office in the same
state as the corporate headquarters. Alan Lacy's "bonus" for selling
Sears down the river was almost as big a payoff as Nardelli's.
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by 2xb 1 day ago
I'd give it to Stan The Man O'Neal who destroyed Merrill. They will be
lucky to survive this mess. Over 94 years of stockholders equity could
be wiped out by O'Neal's reckless actions of the past few years.
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by OrnsteinTheSociopath 1 day ago
congratulations Jonathan (OJ) you dirt bag. Who will you sue for this
outrage? You won't be able to finance the steam off a burger when Ron
Burkle is done with you. ALOHA
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by bannedtrader 23 hours ago
Herb,
Thanks for mentioning Jonathan Ornstein, I think you missed the boat
on naming him #1 , I can't think of a worst ceo than him. You did
miss the fact that Aloha has a 300 mil. lawsuit pending against
Mesa,and from what I have heard, it is a much stronger suit, than the
one already lost to Hawaiian. You also failed to mention the extreme
unethical business practices employed by Mesa under his leadership.
Mesa management makes Enron look like a bunch of choir boys!
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by ind4evr 20 hours ago
I cannot believe that Steve Jobs is not one of the best CEOs of the
year.... Jobs is heaidng a company which is in one of the most
competitive businesses in the world. More than anything else he has
delivered just what he promised with blockbusters products like ipods
and iphone and leopard OS. Today aaple is the most sought after
brand.... not McDonalds for heavens sake !!! this is total BS. I lost
all respect that I had for marketwatch and Greenberg with his
analysis. And to my horror Jobs was not even in the last 5 years as
the top CEO !!!
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trickles down is piss, don'tchaknow?
WEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!
HERB GREENBERG
Worst CEO award goes to Sears' Lampert
Commentary: 2007 was the toughest year yet to pick a 'winner'
By Herb Greenberg, MarketWatch
Last update: 12:01 a.m. EST Dec. 6, 2007Print E-mail RSS Disable Live
Quotes
SAN DIEGO (MarketWatch) -- The winner of this year's Worst CEO of the
Year, awarded annually by this column, isn't a CEO at all, but might
as well be: Sears Holdings (SHLD:sears hldgs corp com
News, chart, profile, more
Last: 115.07+3.29+2.94%
4:00pm 12/07/2007
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Sponsored by:
115.07, +3.29, +2.9%) Chairman Eddie Lampert, who is highly regarded
by many on Wall Street for delivering a steady stream of super-sized
returns as head of ESL Investments.
If it's any consolation, Lampert didn't win by a landslide. There were
simply so many excellent contenders and reader nominations that it was
hard to choose.
Some, like Chuck Prince, formerly of Citigroup (C:Citigroup, Inc
News, chart, profile, more
Last: 34.31-0.04-0.12%
4:00pm 12/07/2007
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Sponsored by:
34.31, -0.04, -0.1%) , and Ed Zander (MOT:Motorola, Inc
News, chart, profile, more
Last: 16.30-0.01-0.06%
4:00pm 12/07/2007
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Sponsored by:
16.30, -0.01, -0.1%) , of Motorola, are out of their jobs, which
takes them out of the running. Also on the list until Wednesday was
Peter van Stolk of Jones Soda (JSDA:jones soda co com
News, chart, profile, more
Last: 6.30-0.30-4.55%
4:00pm 12/07/2007
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Sponsored by:
6.30, -0.30, -4.5%) , an entrepreneur who appeared to be in well over
his head as his company attempts a transition to the big time.
However, like Zander, he has agreed to leave his job by year-end.
Then there are those like Angelo Mozilo of Countrywide Financial
(CFC:Countrywide Financial Corp
News, chart, profile, more
Last: 11.54-0.56-4.63%
4:01pm 12/07/2007
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Sponsored by:
11.54, -0.56, -4.6%) , the most obvious choice to many readers. By
his company's sheer size, he has become the poster child for a
mortgage market gone wild.
However, aside from ill-timed stock sales as his company was buying
back stock, which if nothing else looked bad and Countrywide's
aggressive push into subprime loans at the wrong time it's hard to
single out Mozilo.
Why, for example, shouldn't it be Kerry Killinger of Washington Mutual
(WM:Washington Mutual Inc
News, chart, profile, more
Last: 19.03-0.10-0.52%
4:00pm 12/07/2007
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Sponsored by:
19.03, -0.10, -0.5%) , whose company is loaded with subprime, option
arms and home equity lines and loans in some of the hardest-hit
housing hotspots? Or Jimmy Cayne of Bear Stearns (BSC:The Bear Stearns
Companies Inc
News, chart, profile, more
Last: 100.94+2.73+2.78%
4:00pm 12/07/2007
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Sponsored by:
100.94, +2.73, +2.8%) , whose firm took on more than a few bad
mortgage-related investments? Or Scott Hartman, of subprime lender
NovaStar (NFI:novastar finl inc com new
News, chart, profile, more
Last: 2.81-0.27-8.77%
4:04pm 12/07/2007
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Sponsored by:
2.81, -0.27, -8.8%) , whose company is about to be booted off the New
York Stock Exchange to the bulletin board while on life support?
Away from financial services, Mesa Air's (MESA:Mesa Air Group Inc
News, chart, profile, more
Last: 3.84+0.23+6.37%
4:00pm 12/07/2007
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Sponsored by:
3.84, +0.23, +6.4%) Jonathan Ornstein received the most write-in
votes by employees, investors and employees of competitors. (It was an
impressive, concerted campaign.) Not only does the company suffer the
lowest margins and boast the worst-performing stock among regional
airlines, with "skyrocketing" pilot attrition (per an Air Line Pilots
Association press release), but it recently was embarrassed after a
judge ruled that Mesa must pay $80 million to Hawaiian Air for using
confidential, proprietary information to start its inter-island
Hawaiian competitor, "go!" (Mesa says it plans to appeal.)
Others on the list include: Phil Schoonover of Circuit City
(CC:Circuit City Stores, Inc.- Circuit City Group
News, chart, profile, more
Last: 7.76+0.34+4.58%
4:05pm 12/07/2007
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Sponsored by:
7.76, +0.34, +4.6%) , whose stock is down nearly 70% this year as he
tries to turn the company around; so far, financial results suggest
the turnaround isn't working as several top executives, including one
who was recently promoted, have fled; Jim Tobin of Boston Scientific
(BSX:Boston Scientific Corporation
News, chart, profile, more
Last: 12.73-0.26-2.00%
4:01pm 12/07/2007
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Sponsored by:
12.73, -0.26, -2.0%) back for a second year as his company and stock
continue to reel from its Guidant acquisition several years ago; Pat
Russo of Alcatel-Lucent (ALU:alcatel-lucent sponsored adr
News, chart, profile, more
Last: 8.08+0.23+2.93%
4:02pm 12/07/2007
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Sponsored by:
8.08, +0.23, +2.9%) , whose dismal stock performance is a throwback
to the pre-merger Lucent; Daryl Brewster of Krispy Kreme (KKD:krispy
kreme doughnuts inc com
News, chart, profile, more
Last: 3.47+0.23+7.10%
4:04pm 12/07/2007
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Sponsored by:
3.47, +0.23, +7.1%) , who seems to be dreaming the impossible sugar-
coated dream, and (last but not least) Overstock.com's (OSTK
verstockcom inc del com
News, chart, profile, more
Last: 23.84+0.10+0.42%
4:00pm 12/07/2007
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Sponsored by:
23.84, +0.10, +0.4%) Patrick Byrne back for his third consecutive
year - as his company continues to struggle (despite a remarkably
resilient stock.)
Then there's Lampert, who pre-Sears and Kmart could have won
"investment manager of the year" many times over. This award is
nothing personal. I'm among those who thought ESL's purchase of
Citigroup shares earlier this year was a no-brainer. But Sears has put
him in a position to be judged differently.
Last week, after Sears reported yet another dismal quarter, I
suggested in my blog that maybe the worst CEO should be Sears CEO
Aylwin Lewis, whose concedes quarter after quarter that the company
needs to do a better job. "To be fair," commented hedge fund manager
Jeff Matthews of Ram Partners, "he doesn't have much to work with."
Matthews was right. While it's technically Lewis' show, how can he
turn around the company, as CEO, when the capital decisions aren't
his? (Answer: He can't.) Sears Eddie Lampert, whose quarterly letters
to shareholders, which turned annual last March, reflect vision for
the company.
My skepticism of the Sears turnaround is nothing new and, truth be
told, I was a skeptic of the JCPenney (JCP
enney (J.C.) Company, IncNews, chart, profile, more
Last: 47.92+3.08+6.87%
4:01pm 12/07/2007
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Sponsored by:
47.92, +3.08, +6.9%) , turnaround, as well. (And wrong, I might add.)
The difference is that Penney was being run by a skilled merchant who
had turned around multiple retailers. It has since become place where
middle America shops. By contrast, Sears is being run by Lampert and
Lewis - a hedge fund operator and former executive of YUM! Brands
(YUM:yum brands inc com
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Last: 39.48+0.43+1.10%
4:01pm 12/07/2007
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Sponsored by:
39.48, +0.43, +1.1%) , which is restaurants, not pure retail
certainly not retail in the vein of Sears.
Lampert's mantra has been profits over sales, which makes sense if it
works. As recently as March, in his shareholder letter, he suggested
better times were imminent when he said, "We believe we have
stabilized Kmart's Ebitda and are now in a position to grow from that
base." But retailers, especially those trying to improve themselves,
require considerable capital infusions to drive sales.
So far, for all of Sears, including Kmart, the strategy has failed
miserably. Not only have same-store sales (which Lampert says are
"overrated" as a metric) gone deeper into the red, but gross margins,
Ebitda and operating income for Kmart are also going in the wrong
direction.
While all of this is going on, from out of the blue Sears emerged as a
bidder to buy Restoration Hardware (RSTO:restoration hardware inc del
com
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Last: 7.06-0.09-1.26%
4:00pm 12/07/2007
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Sponsored by:
7.06, -0.09, -1.3%) , which despite long-time efforts to turn itself
around remains a troubled retailer. Investors, meanwhile, keep talking
about Sears, somehow as an asset play. Maybe one day it will be, but
until then it's still largely a retailer. On that score, it's doing so
poorly that following the most recent earnings, analyst Gary Balter of
Credit Suisse, a long-time fan of the Sears story, told clients,
"Unfortunately, visits to the stores show very little evidence that
Mr. Lampert has figured out the magic sauce that makes good retailers
profitable and we doubt that we will see that in the near and medium
term." Hardly a ringing endorsement.
The silver lining, if you can call it that, is that unlike all prior
winners all of whom are no longer in their jobs job security at Sears
is the last thing Lampert has to worry about.
Herb Greenberg is senior columnist for MarketWatch and contributor to
CNBC television based in San Diego. He does not own stocks (except for
shares of his employer), and he does not sell individual stocks short
or invest in hedge funds.
Companies in this story Sears Hldgs Corp (SHLD)
Citigroup, Inc (C)
Circuit City Stores, Inc.- Circuit City Group (CC)
Alcatel-Lucent (ALU)
Yum Brands Inc (YUM)
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28 Comments (view all)
I cannot believe that Steve Jobs is not one of the best CEOs of the
year.... Jobs is heaidng a company which is in one of the most
competitive businesses in the world. More than anything else he has
delivered just what he promised with blockbuster...
- ind4evr
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by RussellUpsomgrubb 2 days ago
The original intention of the K-Mart Sears merger, as I recall it
being stated at the time, was that the combination of stores and
brands would allow the new corporation to be able to compete on a
scale with Wal-Mart, as they would get better deals from wholesale
distributors by buying in greater bulk, as stated in this November 17,
2004 consumeraffairs.com story:
The merger isn't the end of problems for Kmart and Sears, both
struggling to combat Wal-Mart, Home Depot and other powerhouse
retailers. But the combined company will have greater buying power and
more outlets -- 2,350 Sears and Kmart locations and another 1,100
specialty stores.
"The merger will enable us to manage the businesses of Sears and Kmart
to produce a higher return than either company could achieve on its
own," Lampert said in a statement.
Your argument that Lampert plans to pare down the retail base only
proves my point; that he basically lied to the employees and investors
about the future of both companies at the time of the merger.
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by angelsprite 2 days ago
Lampert is killing the goose that laid the golden egg. If he wanted
to be like Warren Buffet, he is failing miserably. Buffet would NEVER
kill the goose that laid the golden egg. Never! He would give it
extra nests, lined with linen and silk, and tie a red bow around it's
neck.
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by Hari123 2 days ago
Herb,
Do u even know who u are talking abt. Go do some reasearch and learn
abt Eddie before popping up and writing an article.
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by DeathSpiral 2 days ago
The worst CEO of the year...
....still laughs all the way to the bank!
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by 6TANGO 2 days ago
A COUPLE OF YEARS AGO, HE WAS A HERO, NOW HE IS A BUM, YOU GUYS JUST
NEED TO HAVE SOMETHING TO WRITE ABOUT.
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by NDL 2 days ago
You overlooked Caplan at E Trade. He did some job for them and their
stockholders, n'est-ce pas??
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by AAAAmerican 2 days ago
Sears Holding really has way too many Call Letters SHLD:OTC and there
old Single Charaqcter Call Symbol ((S:NYSE )) which may have portended
what was going to happen..eh...
Single Character Call Symbols were/are like Single DIGIT License
Plates in Rhode Island.
We have and had been long term customers of there stores now with
every other Retailer Beating there Prices near us by about 33-42% why
should we Shop/Buy there and not even be able to find any Staff to
help us?
We have 7 Sears Stores and 9 K-Marts within our State within 12 miles
and not even including NYC etc... yes and think how many other stores
of competitors are here too ..eh...
When we have gone in to purchase our items there is about 8-12
salespeople hanging around in a group doing nothing but running there
mouths..well talking I guess to each other and not even a sales
meeting either... It has taken each time over 45 minutes for even
somone to come over asking "what ya want" very curtly at that.
Does Sears Holding have Customer Service Sales 101 training anymore?
Oh the latest time we have gone we were interested in buying a stove
and I went finally after nobody came over and asked a staff person to
help us who was in a group of nine salespeople. She said it was not
her department and walked away.. Doesnt she work at the store to help
customers?
Well I dont work in there stores...eh...
So I really think not the CEO Mr. Eddie Lampert but ALL THE FIRM
((SHLD:OTC)) should get the Award you bestow!
NOTE
Peronal message to, Mr. Lampert, Chairman and Mr. Alywin Lewis, CEO
ITS THE PRICE and CUSToMER SERVICEs, you need to improve, stupid!
We are the ones which used to buy at your stores and now no more!
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by Erwin.Rommel 2 days ago
HAHA sears is pathetic at best. It deserves to me meshed into oblivion
along with other crappy run stores like K-mart. Good for the CEO - he
is actually doing something productive with the cash produced from
that piece of garbage company. The staff is seriously clueless and
should be instantly liquidated, along with the former drug addicts
that run K-mart. I don't step foot in either of these garbage joints,
If I need something cheap I realize its better to buy higher quality
things at Home Depot or bed bath and beyond than to save more and have
it break easier. Good job Mr. Lampert if I were you start closing
retail stores, take the existing cash flow and invest it in a
profitable security.
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by engineer93 2 days ago
I would like to see how much all of these poor performer CEOs made
this year and if they got fired, how long it took before they were in
charge of another company. I bet the figures would show that they
made just as much money as a good performer and if fired, that they
had a new job in a few months. Does anyone else see the problem here?
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by shooter21 2 days ago
I am STILL waiting for the market to figure out that Eddie Lampert
should be called "fast" Eddie Lampert given his kiting of Kmart stock
with Sears. Let me explain. Fast Eddie sells a few 'good' locations
to Sears for a hefty paper gain. The market says, "Whoa, what if KMRT
gets that price for ALL of its real estate?" KMRT stock soars. Then
low and behold, KMRT buys Sears ("Hey Sears, thanks for the help
getting the stock rolling." is heard coming from KMRT's HQs!) given
their inflated valuation. Combined company is renamed Sears
Holdings. How much real estate (at the prices that started this whole
charade) have been sold since those early days deals to Sears and HD?
Nada. Zip. Zilch. This was a classic 'kiting' scheme that the
market has, so far, fallen for. Brilliant move by Fast Eddie, but how
repeatable?
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by 1liketolaugh 2 days ago
Eddie Lampert is going to do to the retail business what the Hunt
brothers did to the silver market. Speaking of Montgomery Ward, you
can connect the beginning of the end of Sears with Ed Brennan hiring
an outsider to replace him just like his brother Bernie was CEO for
the downfall of Montgomery Ward. Eddie Lampert is a criminal, and it's
time he shares a cell with Dennis from Tyco. He is and has been
cooking the books.
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by 1liketolaugh 2 days ago
And let's not forget, the MONEY Alan Lacy made when we sold Sears down
the river to Eddie. Bristol Meyers might be next, they just put him on
the board. Eddie, are you going for an inside job towards the
pharmacatical industry now?
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by Johnny 2 days ago
Herb you've been a bear on Sears for years, through its rise and its
fall, and probably started when Sears was at the same price is at now,
so you just conviniently look smart right now on it. It is a crappy
retailer, theres obviously no arguement there. But the face of the
matter is that everybody's, including Lamperts, investment thesis in
Sears is its undervalued asset base, which you conviniently overlook
in your article. Lampert is above all a hedge fund manager and if he
cant make the money on the retailing end (which he can't), hes going
to make it by liquidating those undervalued assets. A recent Barrons
article cites a break up value of $300, so why not triple the present
stock price for himself, in the end, Sears stock and shareholders will
win out on it.
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by Erwin.Rommel 2 days ago
Mmm not neccessarily Engineer93 usually your severance package is
based on your length of empoyment. Its wise for CEO's to stay about
5-10 years. Don't forget CEO's are usually temporary vehicles to drive
performance or projects for a set amount of time. For example, Citi
CEO was hired for bad debt securities. As soon as this mess is over
I'm sure they will hire a new CEO.
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by MrCynical 2 days ago
How is former Merrill Lynch CEO Stan O'Neal NOT on the list?
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by Herb.on.the.shortbus 1 day ago
Thank you, thank you, thank you, Herb!
You are the best contrary indicator I am aware of.
Your stellar calls on Fairfax Financial (FFH) were amazing. You were
junking the company down around $100 per share in 2005 and 2006. Now
it trades at $300!
You also were ripping your boy Byrne when Overstock was at $15. Now
Overstock (OSTK) trades above $23 and is up about 50% this year!
Oh yeah, and let's not forget your past history with Eddie. I seem to
recall you going on CNBC 2 years ago and stating your bearish case on
Autozone when the stock was about $85 per share. As I write this, I
see it is trading at $127. That"s another 50% loser for you!
With SHLD, your negative piece on Eddie gives me full confidence to
buy more stock at these levels. Given your past history, this stock
will easily be $200 - $300 over the next year or two, and you will be
wrong again.
Please, Herb, if you knew so much about running a company, you
wouldn't be in the media-- you would actually be running a company!
You have no concept of Eddie and what he is trying to do, and neither
does Erin Burnett, Fortune magazine, Standard & Poors, etc.
What has Eddie done to deserve such wrath from the media? Is it petty
jealousy that he's successful and you're nothing but a news reporter?
Is it because he is seeking to make a run at retailing and trying to
save jobs (particularly at the pathetic Kmart side where 150,000 to
200,000 will be laid off if he shuts it down)? Is it because he
doesn't spoonfeed you quarterly guidance? What is it?
It is not even deserved. Case in point-- combine the numbers of Sears
and Kmart in 2004 before the merger and see that they made roughly
$828 million in net income; even in a terrible retail environment this
year, they are going to make roughly $1 billion in net income.
Another case in point-- how were Home Depot, Lowes, and JC Penney's
same-store sales numbers compared to the Sears numbers in the recent
quarter? Sears was better than HD and LOW, and just a touch below
JCP. Factor out the new stores in JCP's numbers and they are almost
exactly the same. Why doesn't Ullman get the same criticism that
Eddie does? Oh yeah, and lastly, the stock price-- merger went
through at $100 per share; currently trading at $111. I will be the
first to admit that an 11% return over nearly 3 years is not stellar.
However, that is not a disaster like everyone in the media makes it
out to be.
For all your brilliant "analysis," Herb, I would like to give you my
own award: BIGGEST CONTRARY INDICATOR IN THE MARKETS!
Congratulations! Everytime you open your mouth, successful investors
will know to do the OPPOSITE of what you say! As my above concrete
examples indicate (and my screenname implies), investors can easily
beat the market just by betting against the most "intelligence-
challenged" person in the media. I would also ask that you get Cramer
to turn and bail on Eddie-- then we will have full confirmation that
Sears has bottomed.
Thank you once again for calling the bottom in SHLD!
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by 1liketolaugh 1 day ago
Eddie,
Quit having your little interns reply to these boards. Sign your name
like a real man like you did to your stupid letter to your employees.
Somebody call the whambulance, Eddie's a crybaby.
Maybe it's time to get someone to kidnap you again so you can get some
sympathy, I'd call it sympathy for the devil.
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by sbenard 1 day ago
I would have given it to Nardelli. His contempt for stockholders when
he was head of Home Depot deserves the dubious distinction of the
world's worse CEO for the next century. I won't be buying a Chrystler
while he is at the head, even though I have a relative that works
there.
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by BaldEagle 1 day ago
I can't believe Hector Ruiz of AMD wasn't even in the running! He's
reduced AMD to less than the price of their ATI aquisition in just a
year. Most certainly a worth contender for worst CEO of the year.
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by Scottnaye 1 day ago
I think the winners should be the Board of Directors of the companies
that watched their stock price decline while the CEO exited with
millions of dollars in his pocket...
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by tonyabeth 1 day ago
The board of directors were hand picked by Lampert. Not a retail
person on it. All private equity people. And if you want to talk
about Nardelli's contempt, at least he located his office in the same
state as the corporate headquarters. Alan Lacy's "bonus" for selling
Sears down the river was almost as big a payoff as Nardelli's.
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by 2xb 1 day ago
I'd give it to Stan The Man O'Neal who destroyed Merrill. They will be
lucky to survive this mess. Over 94 years of stockholders equity could
be wiped out by O'Neal's reckless actions of the past few years.
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by OrnsteinTheSociopath 1 day ago
congratulations Jonathan (OJ) you dirt bag. Who will you sue for this
outrage? You won't be able to finance the steam off a burger when Ron
Burkle is done with you. ALOHA
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by bannedtrader 23 hours ago
Herb,
Thanks for mentioning Jonathan Ornstein, I think you missed the boat
on naming him #1 , I can't think of a worst ceo than him. You did
miss the fact that Aloha has a 300 mil. lawsuit pending against
Mesa,and from what I have heard, it is a much stronger suit, than the
one already lost to Hawaiian. You also failed to mention the extreme
unethical business practices employed by Mesa under his leadership.
Mesa management makes Enron look like a bunch of choir boys!
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by ind4evr 20 hours ago
I cannot believe that Steve Jobs is not one of the best CEOs of the
year.... Jobs is heaidng a company which is in one of the most
competitive businesses in the world. More than anything else he has
delivered just what he promised with blockbusters products like ipods
and iphone and leopard OS. Today aaple is the most sought after
brand.... not McDonalds for heavens sake !!! this is total BS. I lost
all respect that I had for marketwatch and Greenberg with his
analysis. And to my horror Jobs was not even in the last 5 years as
the top CEO !!!
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