Sears Eyes New Strategy -- WSJ

As the longtime CFO steps down and sales drop, the retailer looks to transform itself

By Kimberly S. Johnson 

Sears Holdings Corp. is losing its finance chief, as the company remains mired in red ink and explores strategic alternatives for some of its most-prized brands.

Robert Schriesheim, the Hoffman Estates, Ill.-based retailer's chief financial officer plans to step down from the role, for which Chief Executive Edward Lampert selected him in 2011. Mr. Schriesheim, 56 years old, said he would pursue other career opportunities and devote more time to the four boards on which he serves, and to his family.

"I've had a very long and productive tenure and a very strong relationship with Eddie Lampert," Mr. Schriesheim said. "Eddie is an unconventional thinker, and I've loved being in a supporting role."

The announcement came as Sears reported a loss of $471 million, or $4.41 a share, for the quarter ended April 30, compared with a loss of $303 million, or $2.85 a share, a year earlier.

Excluding certain items, however, Sears's adjusted loss shrunk to $1.86 a share from $2 a share.

Revenue fell 8.3% to $5.39 billion. Same-store sales dropped 6.1%. Kmart same-store sales declined 5%, and Sears domestic same-store sales fell 7.1%.

The company also said it would "explore alternatives" for its Kenmore, Craftsman and DieHard brands, as well as its home-services business.

But Mr. Schreisheim cautioned against assuming the result would be a sale of those assets, explaining the company has retained advisers to look at "opportunities to explore their potential growth outside the Sears ecosystem."

Sears is stumbling through efforts to transform itself by investing in new technologies and services to better equip it for the digital age. It also has focused on returning to profitability, homing in on assortment, sourcing, pricing and inventory-management practices, sometimes at the expense of sales.

During Mr. Schriesheim's tenure at Sears, the company raised about $9 billion by selling real-estate and business units, including the Lands' End clothing chain and Sears Hometown and Outlet Stores.

His length of time at the company is notable because many executives there "tend to last less than a year or two," wrote Evercore ISI analyst Greg Melich in a research note. The current average tenure for retail company CFOs is 5.8 years, according to Korn/Ferry International.

Mr. Schriesheim joined Sears in August 2011 after a CFO stint at consultancy Hewitt Associates, which was sold to the insurer at the time known as Aon Corp. in 2010.

He has a long history of working or partnering with private-equity firms, hedge funds and large institutional investors in what he called "in special-situation investments."

He was CFO of Global TeleSystems Group Inc., which owned telecommunications assets in Europe and Russia and was partly funded by investor George Soros.

Mr. Schriesheim said he was attracted to Sears because he would get to work in a transformational environment. "A plain-vanilla type of role was kind of less appealing to me," he said. I'd probably add less value to that."

Mr. Schriesheim concedes Sears' results have been less than stellar. Still, the ability to engineer innovative asset-reconfiguration activities such as asset sales and rights offerings has been rewarding and created financial flexibility for the company, he said.

"People see the Ebita numbers and the decline in same-store sales and, I suppose, it makes for good sound bites," he said. "Do I take responsibility for the operating performance? Of course, I'm the CFO...I'm more focused on, in terms of substance, how we move the ball forward."

Sears didn't offer a time frame for naming a new CFO. Mr. Schriesheim will remain in the role until a successor is named and as an adviser to the company until January 2017.

--Anne Steele contributed to this article.

(END) Dow Jones Newswires

May 27, 2016 02:48 ET (06:48 GMT)

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