Struggling department store chain Sears Holdings Corp. (SHLD) said Monday that Louis D'Ambrosio will step down as the company's chief executive officer due to family health matters. He will be succeeded by Edward Lampert, who will also continue in his role as chairman of the board of directors.
Sears Holdings, which operates namesake stores and Kmart brand, said that D'Ambrosio will retire at the end of the company's fiscal year on February 2. He will remain on the board until the company's next annual meeting of stockholders to be held in May 2013 and will be available to assist with a smooth transition.
Hedge fund manager Lampert formed the company by merging Sears and Kmart in 2005, while D'Ambrosio joined Sears as its CEO and president in February 2011. D'Ambrosio earlier served as the president and CEO of Avaya Inc. from July 2006 to June 2008 and also served as one of its directors from November 2006 to June 2008.
Previously, D'Ambrosio was Avaya's senior vice president and president of global sales and marketing from November 2005 until July 2006. Prior to joining Avaya, he spent 16 years at International Business Machines Corp. (IBM), where he held several executive posts and was a member of the worldwide management committee.
Lampert said, "The Board greatly appreciates Lou's strong leadership in accelerating the transformation of Sears Holdings, and we understand and respect his personal decision to step down. Lou has guided Sears Holdings during a time of rapid industry change to become a more customer and Member-focused company and positioned us to lead in Integrated Retail."
Lampert added that he agreed to assume the additional responsibilities in order to continue the company's recovery and sustain the momentum.
Separately, Sears Holding forecast net loss for the fourth quarter in a range of $280 million to $360 million, or $2.64 to $3.40 per share. The outlook includes an estimated non-cash charge of about $450 million related to pension settlements from the company's voluntary offer to term-vested employees and $42 million of pension expense.
Adjusted for these items, the company forecasts net income between $132 million and $212 million, or between $1.25 and $2.00 per share.
Analysts polled by Thomson Reuters expect the company to earn $0.86 per share. Analysts' estimates typically exclude special items.
For the fiscal year 2012, Sears Holding forecasts net loss between $721 million and $801 million, or loss of $6.80 to $7.56 per share. The outlook includes the estimated fourth-quarter non-cash charge of about $492 million and other year-to-date adjustments.
Adjusted for these items, the company projects net loss for the year between $123 million and $203 million, or $1.16 to $1.92 per share.
Analysts expect the company to report loss of $2.66 per share for the year.
Sears also reported a 1.8 percent decline in total comparable store sales for the nine-week period ended December 29. This was largely due to sales declines in the consumer electronics category at both Sears and Kmart.
Excluding the consumer electronics category, comparable stores sales decreased 0.2 percent, with comparable store sales at Sears Domestic increasing 2.4 percent and Kmart comparable store sales decreasing 2.4 percent.
For the year-to-date period ended December 29, Sears' total comparable store sales declined 2.6 percent, reflecting a 1.6 percent decline at Sears Domestic and a 3.7 percent decrease at Kmart.
SHLD closed Monday's trading at $42.92, up $0.73 or 1.73 percent on a volume of 954,874 shares.
by RTT Staff Writer
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