HOFFMAN ESTATES, Ill. — Sears Holdings Corp. has moved to reverse its declining performance by hiring Ron Boire, the former president and chief executive officer of Brookstone Inc., as executive vice president, chief merchandising officer and president, Sears and Kmart formats.
Sears Holdings Corp. has moved to reverse its declining performance by hiring Ron Boire, the former president and chief executive officer of Brookstone Inc., as executive vice president, chief merchandising officer and president, Sears and Kmart formats.
In this role, Boire will be responsible for merchandising and for both Sears- and Kmart-bannered stores.
The appointment comes close on the heels of management’s decision to shutter as many as 120 Sears and Kmart locations following striking declines in comparable-store sales at both chains during the eight weeks prior to Christmas. Comp-store results at Kmart fell 4.4% during that period, while Sears Domestic stores posted a 6% decline. Management consequently warned that lower sales and pressure on margins will combine to cut fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to less than half the $933 million earned in the fiscal 2010 period.
Standard & Poor’s Ratings Services responded by putting Sears on negative watch to push the “B” rating of its long-term debt further into junk territory, declaring that the decision to close stores may do little to help it. "We believe that one of the primary issues is that the company has underinvested in its store base, especially when compared with its peers," the agency declared in a note.
On December 29 the company identified 79 of the locations that will be closed, and the same day Fitch Ratings downgraded Sears’ rating to ‘CCC’ from ‘B,” citing the deterioration in EBITDA. The ratings agency further said it expects Sears’ liquidity to be inadequate this year, and warned that if EBITDA does not grow or the retailer cannot find other sources of cash, there will be greater risk of restructuring over the next two years.
Sears, and particularly its chairman Edward Lampert, has come under increasing fire for not hiring or retaining executives with relevant retail experience. Lou D’Ambrosio, who was appointed president and CEO of Sears Holdings in February 2011, came from the information technology sector.
Since Lampert merged the two retailers in 2005, the company has posted sales declines every year.
"We are in the midst of a transformation of our business from top to bottom as we seek to become the leading integrated retailer in the country," said D’Ambrosio. "By attracting someone with Ron’s significant experience in retail, merchandising and product development as well as in leading companies through turnarounds, we’re adding a key talent in accelerating our transformation."
Before joining Brookstone, Boire served as president, U.S. Toys, North America, for Toys ‘R’ Us Inc. from 2006 to 2009, with responsibility for merchandising, marketing and operations for the company’s 600 domestic stores and 70 Canadian outlets. Prior to that he had been executive vice president and global merchandise manager for Best Buy Inc. He previously had served in a variety of management positions over the course of a 17-year career at Sony Electronics Inc., where he ultimately served as president of Sony Consumer Sales Co. and Sony Personal Mobile Products Co.
"I understand the company’s challenges, but I am more persuaded by the company’s opportunities and strengths," said Boire. "As a copany with over $40 billion in sales, millions of customers, irreplaceable brands, thousands of stores and committed associates, we have a lot to work with."
