Sears And Victoria's Secret: Both Say Comebacks "In Store" - Holiday Central

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It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

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Feb.29

9:21 AM ET

Friday, 29 Feb 2008

Sears And Victoria's Secret: Both Say Comebacks "In Store"

Posted By:Margaret Brennan

Topics:Advertising | Marketing | Stock Market | Consumers | Retail Sales

Sectors:Personal and Household Goods | Retail

Companies:Limited Brands Inc | Sears Holdings Corp | Jones Apparel Group Inc | Wal-Mart Stores Inc | Target Corporation

CNBC.com
Eddie Lampert, Chairman of Sears and hedge fund king, has asked for Wall Street to think of him as the underestimated comeback quarterback of the Giants. So is Eddie Lampert the Eli Manning of retail?

Thursday, he told shareholders that they shouldn't count Sears [SHLD Loading... () ] out. The game is still on despite the fact that the discounter has capitulated marketshare to Wal-Mart [WMT Loading... () ] and Target [TGT Loading... () ] . And despite the fact that net income dropped 47 percent in the fourth quarter to $426 million dollars, down from $811 million last year. And despite the fact that same store sales dropped every quarter during which he has been Chairman.

At the end of this fourth quarter, earnings were $3.04 a share--six cents below the Street's consensus.

Lampert admits some bad plays--gross margins declined by more than a billion dollars from last year because management failed to account for an economic slowdown in their inventory expansion. Fundamentally though, Lampert thinks that Wall Street doesn't have its eye on the ball, "'it is generally not well understood or appreciated how much we have reduced our debt and pension obligations."