Shares of Sears Holdings (SHLD - Free Report) were down more than 9% in morning trading Monday after the struggling retail company announced that a key investor is leaving its board of directors.
The departing executive is Bruce Berkowitz, the chief investment manager of Fairholme Capital Management. Berkowitz joined Sears’ board in February 2016, although his investment in the retailer dates back more than a decade.
“On behalf of the board of directors and management, I want to thank Bruce for his long-term commitment and investment in Sears Holdings,” said Sears CEO Eddie Lampert. “His leadership, guidance and counsel as a board member have been invaluable to our company.”
Berkowitz first took a stake in Sears in August 2005. Consistency in picking solid investments brought Berkowitz widespread acclaim, and his Fairholme Fund would peak in 2011. However, the fund has slumped on the back of Sears’ well-documented struggles.
Nevertheless, Fairholme has remained one of Sears’ biggest investors—often behind only Lampert’s own hedge fund, ESL Investments. Berkowitz and Fairholme have also invested in Seritage Growth Properties (SRG), a real estate investment trust that spun off from Sears Holdings about two years ago.
At one point, Fairholme’s success led to Berkowitz being named fund manager of the decade by research firm Morningstar. But Berkowitz has remained loyal to the sinking ships of SHLD and SRG, and his credibility as a fund manager has subsequently tumbled.
“Mr. Lampert and Mr. Berkowitz have a long-standing partnership and continue to have great respect for each other,” a Sears spokesperson told CNBC. “They both expressed their appreciation for the time they spent together serving on Sears' board of directors.”
Berkowitz’s departure comes in the wake of the news that Sears is planning to liquidate its Sears Canada stores. The company will close 82 locations, leaving 12,000 employees without a job. Sears Canada had previously declared bankruptcy in June, but the retailer could not find a buyer for its assets.
Sears Holdings is a minority owner of the Sears Canada brand, so the news led to even more investor frustration. SHLD also recently announced that it was taking another $100 million loan from Lampert’s ESP Investments in an effort to keep itself afloat through the holiday season.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Shares of Sears Holdings (SHLD - Free Report) were down more than 9% in morning trading Monday after the struggling retail company announced that a key investor is leaving its board of directors.
The departing executive is Bruce Berkowitz, the chief investment manager of Fairholme Capital Management. Berkowitz joined Sears’ board in February 2016, although his investment in the retailer dates back more than a decade.
“On behalf of the board of directors and management, I want to thank Bruce for his long-term commitment and investment in Sears Holdings,” said Sears CEO Eddie Lampert. “His leadership, guidance and counsel as a board member have been invaluable to our company.”
Berkowitz first took a stake in Sears in August 2005. Consistency in picking solid investments brought Berkowitz widespread acclaim, and his Fairholme Fund would peak in 2011. However, the fund has slumped on the back of Sears’ well-documented struggles.
Nevertheless, Fairholme has remained one of Sears’ biggest investors—often behind only Lampert’s own hedge fund, ESL Investments. Berkowitz and Fairholme have also invested in Seritage Growth Properties (SRG), a real estate investment trust that spun off from Sears Holdings about two years ago.
At one point, Fairholme’s success led to Berkowitz being named fund manager of the decade by research firm Morningstar. But Berkowitz has remained loyal to the sinking ships of SHLD and SRG, and his credibility as a fund manager has subsequently tumbled.
“Mr. Lampert and Mr. Berkowitz have a long-standing partnership and continue to have great respect for each other,” a Sears spokesperson told CNBC. “They both expressed their appreciation for the time they spent together serving on Sears' board of directors.”
Berkowitz’s departure comes in the wake of the news that Sears is planning to liquidate its Sears Canada stores. The company will close 82 locations, leaving 12,000 employees without a job. Sears Canada had previously declared bankruptcy in June, but the retailer could not find a buyer for its assets.
Sears Holdings is a minority owner of the Sears Canada brand, so the news led to even more investor frustration. SHLD also recently announced that it was taking another $100 million loan from Lampert’s ESP Investments in an effort to keep itself afloat through the holiday season.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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