EDWARD
LAMPERT
Edward Lampert is known as the secretive and savvy
financier behind the merger of Kmart with Sears. The
hedge fund manager’s move was considered a shocker when
he announced that he was merging Kmart, a company he
controls with a 53 percent stake, with fellow struggling
retail icon Sears. It became the country's biggest retail
merge ever.
After shareholders and antitrust regulators approved the
deal, the combined company was then named Sears Holdings.
It became the country's fourth retailer after Wal-Mart,
Home Depot, and Kroger. Lampert suggested that the merge
would enable them to manage the businesses of Sears and
Kmart to produce a higher return than either business was
capable of when they were on their own.
USA Today indicated that investors agreed with the
combination as Kmart was up almost 8% to close at $109 a
share, while Sears was up more than 17% to $52.99.
Many investors believed in the merge as the financial
insight of Lampert,
allowed him to control 53% of Kmart and 14.6% of
Sears. Lampert’s skills were recognized as he
brought Kmart back by selling underperforming
stores, raising prices and limiting capital
expenditures. The move impressed Wall Street as
Kmart shares have appreciated nearly 550% since May
2003 when the company emerged from bankruptcy court.
As for Sears, after the merge Lampert indicated that
he would improve gross profits by $200 million a
year as the stores cross-promote each other's
exclusive brands and as the chain converts
non-mall-based Kmart stores into Sears stores.
With a well-known track record as an investor
extraordinaire, Lampert was compared to Warren
Buffett in Business Week.