Sears Holdings Corp. said Monday night that Chief Executive Officer Louis D'Ambrosio will step down Feb. 2, due to family health matters, and Chairman Edward Lampert will add the role of CEO.
The surprise move fuels uncertainty at the Hoffman Estates-based company, which has struggled for years to re-establish itself as a department store in an ultracompetitive retailing industry dominated by low-price giant Wal-Mart and big box and specialty stores.
Shares of Sears Holdings were up 2.3 percent in premarket trading on the news.
The decision by Lampert, a hedge fund operator who is the company's biggest shareholder, to take over day-to-day control represents a reversal from his naming of D'Ambrosio as chief executive nearly two years ago after operating with an interim CEO.
"In light of Lou's decision to step down, the board feels it is important that there is continuity of leadership during this important period of transformation and improvement at Sears Holdings," Lampert said in a statement. "I have agreed to assume these additional responsibilities in order to continue the company's recovery and sustain the momentum we are experiencing, as well as further the development of the management team under the distributed leadership model, which provides our business unit leaders with greater control, authority and autonomy."
Sears Holdings, which operates Sears and Kmart, also updated its fourth-quarter earnings outlook Monday night. The company said it expects to report a net loss $280 million to $360 million, or $2.64 to $3.40 per diluted share, for the quarter ending Feb. 2. The loss includes a charge of about $450 million because of pension settlements and an additional $42 million in pension expenses.
Excluding pension expenses, Sears said it expects to earn $132 million to $212 million, or $1.25 to $2 per share.
Analysts polled by Bloomberg had been expecting adjusted net income of about $137 million.
For the fiscal year, Sears said it expects to lose $721 million to $801 million, or $6.80 to $7.56 per diluted share, which includes pension-related costs and other adjustments reported late last year. Excluding those items, the company said it expects to lose $123 million to $203 million, or $1.16 to $1.92 per share.
D'Ambrosio became CEO after working for the company as a consultant. The 16-year veteran of IBM Corp. had been CEO of a telecommunications company before joining Sears.
"I have worked very closely with Eddie over the past two years. I can say this: there is simply no one in the world that cares more about Sears Holdings and has thought more deeply about our company than Eddie," D'Ambrosio wrote to employees.
Lampert gained control of Sears in 2005 after engineering the merger between Kmart and Sears Roebuck & Co. For years, speculation about Lampert's intentions for the company focused on the value of its real estate, but under D'Ambrosio, Sears appeared to pay more attention to retail aspirations.
The company reported improved performance -- it beat Wall Street expectations -- in the previous quarter, but Sears stock has lost more than 35 percent of its value since November, closing Monday at $42.92, up 1.7 percent.
Distributed by MCT Information Services
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