Leadership Case Study

Sears – Can Edward Lampert Save It?

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Abstract:
In November 2004, Edward Lampert, the hedge fund owner and Chairman of Kmart Holdings Corporation, an out-of-bankruptcy discount retail chain announced the merger of Kmart with Sears, Roebuck & Corporation, an ailing US department store company. The combined entity, called Sears Holdings Corporation, was expected to reverse the fortunes of the two iconic, but faded retail brands. However, Lampert's distinct leadership style and poor strategic decisions led to the merger's failure. In 2008, Lampert, desperate to turn around the combined entity, adopted a changed managerial approach and outlined a new revival strategy. The case focuses on the impact of Lampert's leadership on Sears and highlights the contribution of leadership to an organisation's success.

Pedagogical Objectives:

• To analyse the critical success factors of the US department store industry and Sears' business problems.
• To explore the rationale behind the Sears-Kmart merger and the reasons for its failure.
• To analyse the role of leadership in the success of an organisation's business.

Keywords :  Sears, Roebuck & Co, Lampert, Department store industry, Kmart, Hedge fund, Mergers and acquisitions, Wal-Mart, Catalogue, Apparel, Bankruptcy, Lands End, ESL Investments, Craftsman, Kenmore