Sears Holding Corporation (SHLD) management is drawing harsh criticism from brand management experts.
Despite posting a modest 3.3% gain today after reporting positive sales figures for July and August a day before, a rarity for the company in recent years, the company's longer-term outlook is abysmal.
And experts are calling for CEO Eddie Lampert to step down.
"Sears is dying not only from a change in the retail environment, but from grossly misguided leadership," Eric Schiffer, CEO of the Patriarch Organization and Chairman of Reputation Management Consultants, told Real Money in an interview.
Schiffer called Lampert's handling a "shameful mismanagement" of the legacy retailer.
"Sears is a giant dumpster fire," he said emphatically. "The thing that will finally take the company out is its leadership."
Lampert also drew criticism from Schiffer over the company's handling of its pension plans, which the CEO has lamented in recent earnings and public statements.
"Since 2005 we have contributed over $4.5 billion to fund our pension plans," Lampert wrote in a blog post yesterday. "Had the company been able to employ those billions of dollars in its operations, we would have been in a better position to compete with other large retail companies."
Schiffer called the blog post from Lampert a "disgrace."
"Blaming pensioners for a lack of cash flow?" he asked. "It's not their money!"
Schiffer told Real Money that the blog post is "yet another excuse" from Lampert to explain the company's stock slide that led the company from over $30 per share when he assumed leadership in 2013 to just over $1 today.
Conflicts of Interest
Schiffer further picked on Lampert's conflicts of interest with his ESL Investments hedge fund, which has been Sears' largest shareholder for some time and has sought to purchase different entities from the core company.
He accused the CEO of shirking his fiduciary duty to shareholders in order to bolster his hedge fund.
The topic was also touched on by Real Money contributor David Butler this morning, in discussing the current $400 million offer to purchase Kenmore, one of Sears' last profitable brands.
"If Lampert successfully gets his hands on Kenmore, there will be even less in Sears arsenal that it can actually sell," he wrote. "All in all, it's clear that Lampert wants to get that last big asset out of Sears before the shell of a company collapses."
The conflict of interest in selling assets from a company he manages to a fund he also manages has raised eyebrows across the industry, as noted in the New York Times multiple times this year.
Board to the Rescue?
To be sure, Schiffer said that the company is not beyond repair, and simply needs new and competent leadership to save shareholders and the company "from being burnt to ashes."
"The board needs to be actively looking for a new leader," he urged. "They need one that knows e-commerce and the new retail industry cold."
He added that new leadership could be the necessary catalyst for the company to leap back into the retail game, by leveraging online retail as a growth engine.
"They need an out of the box thinker," he said. "Can you imagine if someone like [ (AMZN) CEO] Jeff Bezos was running the company?"
Schiffer, like other experts in the industry, said the company must partner with major e-commerce players, adapt to the changing retail environment that is moving online, or simply continue its march toward bankruptcy.
Needless to say, should the company remain under Lampert's watch, Schiffer is not confident in the company's ability to avoid the latter option.