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Sears Holding Corp. Names Interim CEO After Top Executive Steps Down

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By ASHLEY M. HEHER, The Associated Press

Published: January 29, 2008

CHICAGO - Sears Holdings Corp. abruptly announced the departure of President and chief executive Aylwin B. Lewis on Monday, leaving a management void at the top of the department store chain controlled by chairman Edward S. Lampert as it tries a high-stakes restructuring to reconnect with customers and reinvigorate slumping sales.

Lewis was an executive at fast-food chain Yum Brands and had little retail experience when he was hand-picked by Lampert in 2004 to run Kmart and later Sears. W. Bruce Johnson was named interim CEO while the company looks for a permanent successor.

Monday's announcement marked the latest chapter for the venerable retailer, which has seen its competitors snatch away customers since Lampert acquired Kmart in 2003 and Sears, Roebuck and Co. in 2005.

At the time, Lampert - a masterful hedge fund investor who controls all major decisions made at Sears Holdings - promised to reinvigorate the faded retail icons and "transform them into a great company."

Nearly three years later, Lampert's task has proven difficult, if not downright impossible, as the company's 3,800 stores fail to attract many customers.

"He certainly has his work cut out for him," said Morningstar analyst Kim Picciola. "Even the total organizational change is an indicator that it was a much greater challenge than what they realized."

For the first three quarters of the year, Sears' profit has fallen more than 40 percent. And earlier this month the company said it managed to post third-quarter earnings of just $2 million - down 99 percent from last year.

Adding to investors' frustrations was a warning that Sears likely would post fourth-quarter earnings well below Wall Street forecasts as eroding sales push its profit down as much as 57 percent.

The company said it expects to earn between $350 million and $470 million, or $2.59 to $3.48 per share, for the quarter ending Saturday - far less than the $4.43 per share sought by analysts surveyed by Thomson Financial.

Sears earned $820 million in the fourth quarter a year earlier.

Sears shares, which reached a high of $195.18 in April, rose $1.28, or 1.3 percent, to $100.28 Monday.

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