In an article dated October 24, 2017 on BNN, Eddie Lampert, CEO of Sears Holdings complained that “Sears Canada could have avoided liquidation.”
Lampert, who has been lauded as the next Warren Buffett, seems to think that Sears Canada executive chairman Brandon Stranzl made a mistake when he introduced his “Sears 2.0” strategy in 2016. Lampert, through his ESL Holdings held a large stake in Sears Canada and said that, “ESL believed that [Sears 2.0] strategy was highly risky and unlikely to succeed.”
Let’s look at the failings of Brandon Stranzl at Sears Canada and Eddie Lampert at Sears Holdings by comparing the stock prices of the respective companies. As Warren Buffett’s mentor Benjamin Graham said, “in the short run, the market is a voting machine but in the long run, it is a weighing machine.”
Brandon Stranzl tenure at Sears Canada:
Eddie Lampert tenure at Sears Holdings:
There is such a refreshing difference between the Lampert years at Sears Holdings compared to the job done by Stranzl. The primary difference is that Sears Holdings was already in a rising trend in the stock price before Lampert took over. Therefore, we cannot necessarily attribute the near doubling in price to the fact that Lampert did anything revolutionary at the company.
Ultimately, Lampert, when faced with challenges, was not equal to the task, as reflected in the subsequent decline in Sears Holdings. Contrast Lampert’s good fortune of taking over when the company stock price was already in a rising trend to the challenge of Stranzl who took over Sears Canada after the stock price had been in a multiyear declining trend.
If the passage of time truly weighs the impact of stock value then Lampert’s years have proven to be of little merit to the shareholders of Sears Holdings. Meanwhile, Stranzl’s two year history at Sears Canada was merely a vote of no confidence as a result of prior lack of leadership.