Out Of The Frying Pan? Ex-Circuit City Execs Leave One Failing Retailer For Another

Just a quick snark over this news item from last Monday.

TWICE: Ex-Circuit Execs To Run Sears' Majaps, Tools

Sears has tapped two top former Circuit City executives, John Froman and Doug Moore, to run core product categories for the chain.
Froman, one-time executive VP and COO at Circuit City, has joined Sears as a corporate senior VP and president of the company’s tools and lawn-and-garden businesses.
Moore, a former chief merchant at Circuit City who joined Sears last June, has been promoted from hardlines merchandising senior VP to corporate senior VP and appliances president.
Froman left Circuit City three years ago after nearly two decades with the CE chain. He most recently served as CEO of Namco, a regional chain of family recreation superstores.
Moore spent 17 years with Circuit City, including a 1998 stint as general manager of the retailer’s builder appliances sales division. He left last year as executive VP/chief merchandising officer.

So, is this a step up, or down? I'm not too sure. I do know that I showed incredible restraint in avoiding the headline "Managing Tools For Sears: It Takes One To Know One."

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Sears: One Thing After Another

As it happens, I was having coffee yesterday with an industry contact, and one of the things we talked about was the sad state that Sears is in. So it's interesting to see this bearish item pop up on my screen this morning:

24/7 Wall St: Eddie Lampert Taps Out At Sears

Is Sears (SHLD) getting a little low on cash? A bunch of analysts think so. The cash balance that Sears showed in its last financial statement was a bit light.
According to The Wall Street Journal "less cash could limit management's ability to spend big to revitalize sales and stores." Since retailer customers are going Wal-Mart (WMT), Best Buy (BBY), and JC Penney (JCP), Sears will almost have to improve both its stores and its inventory. With retail already in trouble due to an economic slowdown, the question is, where will Sears go for the cash?

There's two places where Sears can get money: customers' pockets and the capital markets. So far Sears has proved unable to get cash out of customers, so where's the incentive for investors to give them any more, unless it's at a steep risk premium?

By the way, the graphic above, of an empty parking lot in front of a Sears store seemed entirely apropos.

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Lewis out at Sears

Since they lack deck chairs, Sears Holdings opted instead to rearrange their executives.

TWICE: Lewis To Leave Sears

Sears Holdings CEO Aylwin Lewis will step down later this week and be replaced on an interim basis by W. Bruce Johnson, executive VP, supply chain operations.

The names may change, but Sears' swan dive course appears to be set.

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Hardly Breaking News: Sears, Kmart still struggling

TWICE: Sears, Kmart Comps Down 4% May-June

Hoffman Estates, Ill. — Sears Holdings reported a 4 percent decline in comp-store sales at both its Sears and Kmart chains for the nine-week period, ended July 7.
At Sears, major appliances saw the steepest slide while Kmart experienced declines across most categories, the company said. Despite the slump in white goods, majap comps improved over the first quarter.
“We are disappointed with our recent performance,” said CEO Aylwin Lewis, “Although we believe our business has suffered from many of the same factors that have led other retailers to announce disappointing results and lowered expectations our recent performance underscores our ongoing need to become more relevant to consumers while improving our discipline around expense management.”
Sears projects net income for the second quarter, ending Aug. 4, to fall between $160 million and $200 million, compared with $294 million for the year ago period, based on current sales trends. The company expects to end the quarter with about $2.8 billion in cash.

This is one of those stories that I resent covering, but feel honor-bound to do so, out of a sense of completeness. The word that Sears is out of touch with consumers is hardly news. I think we all now know that JC Penny, Target and Wal-mart have been eating Sears' lunch for some time now.

Face it, do you or anybody you know shop there? That's what I thought.

It doesn't make it any better that we keep hearing the same tired old excuses for why the venerable retailer can't seem to pull it off. Here's a hint: stop blaming your failures for things that are beyond your control, and better control the things that are in your grasp. That's great advice for an individual, and even better advice for a corporation. Retail isn't hard: it's selling stuff to people. Anybody who starts shuffling their feet and mumbling otherwise is just making excuses for their own lack of ability.

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