the art of the smart, page-6

Hi Buddy,

I sold out during the period where the shares were getting settled but not yet showing as trading over the consolidation period so was lucky to get out with most of my reduced profit and initial capital.

You see the big problem lies within the management not the projects. Heres an article i came across tonight worth reading.

Note to Eddie Lampert: It’s the management, stupid
January 28, 2008, 5:54 pm
Source: www.cnnmoney.com

Here’s a tale of two retailers.

Back in 2005, both Sears (SHLD) and Toys ‘R’ Us were down on their luck and in danger of permanently losing relevance with their customers. Both were bought by financial firms, Sears by the hedge fund ESL Investments, controlled by Edward Lampert, and Toys “R” Us by a group that includes Kohlberg Kravis Roberts & Co., Bain Capital and Vornado Realty Trust (VNO).

That’s where the similarities end.

At Toys “R” Us, the new owners installed Gerald Storch as chief executive and gave him the leeway to do his job. Storch, a former Target executive known for his merchandising skills, carved out a niche for Toys “R” Us that got it out of Wal-Mart’s (WMT) direct path. He added more exclusive merchandise, improved customer service and renovated stores. The result? Toys “R” Us is on track to report a great year - despite all the toy recalls that have ravaged the industry.

Granted, with $13 billion in sales (compared with Sears’ $50 billion) Toys “R” Us is a less complicated turnaround. Even so, at Sears, things have turned out differently. Lampert, who has barely disguised his disdain for retail executives, has not hired the talent to get the job done. Sales are declining and profits are shrinking. After two years of experimenting with various strategies to revive Sears, Lampert is once again shaking things up.

On Monday, Sears said that Chief Executive Aylwin Lewis would leave the company on Feb. 2. He is to be temporarily succeeded by Bruce Johnson, who has a background in operations and logistics, while a permanent replacement is sought.

The management shakeup comes one week after Sears said it would divide itself into five business units, in an attempt to make managers more nimble and accountable.

It remains unclear what tangible results either change will produce. Lewis, a former fast food executive, was largely seen as an ineffectual CEO, a cheerleader charged with keeping moral from plummeting while he did Lampert’s bidding.

What Sears needs, most observers agree, is some serious merchandising talent in the senior ranks, but “Eddie doesn’t have a lot of respect for merchants,” said one person who has worked with him. “He’d rather hire a young kid from Goldman Sachs or General Electric and teach them about the business.”

For those who still believe that a break up is in the works, here’s what another associate of his has to say about Lampert’s ambitions: “Eddie wants to reinvent retailing - he wants to show everyone how it can be done.”

Here’s one tip for success: Hire Gerald Storch.

Is there a quick fix for Sears? Maybe not, but here are a few ideas.

Manage the Warren Buffet way
Hire talented people who understand retailing and let them do their jobs.

Make Sears stand for something
Great retailers have a vision that permeates every aspect of their business. Sears still has credibility in hard lines. Make it THE place to shop for washing machines, refrigerators, lawnmowers and tools. Back up great products with unparalleled customers service.

Invest in the stores
Lampert is right that investing for the sake of investing makes no sense. But once you have the right people and strategy in place, you then have to put money behind your ideas.


You see Stephen Mitchell and Don Beard (Old Blood) need to step down or simply move on so that Gorman can become the new CEO with the Authority to run this CSG company the way he see's fit he is the expert in CSG after all not Beard or Mitchell.

Don Beard and Stephen Mitchell you guys have been here for over a decade and have been through everything from gold exploration, oil exploration, accounting firms, company name changes etc etc.

Its time to give someone else a go.... don't you think?