Sears Rises on Speculation Lampert May Take Retailer Private

Sears Holdings Corp. (SHLD), the retailer controlled by hedge fund manager Edward Lampert, rose the most in more than three months amid speculation that the company may seek to go private.

The shares climbed 9.5 percent to $36.75 at the close in New York for the biggest gain since Oct. 4. The Hoffman Estates, Illinois-based company’s stock dropped 56 percent in 2011.

Sears, working to turn around four years of declining sales, has lost ground as shoppers have flocked to such rivals as Macy’s Inc. Lampert, who owns about 60 percent of Sears and serves as chairman, may seek new capital and to reorganize operations, said Paul Swinand, an analyst with Morningstar Inc. (MORN)

“Restructuring is often easier taken under private hands,” Swinand, who is based in Chicago, said today in a telephone interview. “Anything that gives you more flexibility is an advantage.”

Lampert bought 4.46 million shares from his ESL hedge fund at $29.20 per share, according to a regulatory filing last week.

Sears’s suppliers are now unable to get loans from CIT Group Inc. for their shipments to the retailer, two people familiar with the situation said last week. CIT, the largest U.S. company that provides what’s known as factoring, told clients it would no longer approve credit for orders after Jan. 11, according to the people, who declined to be identified because the information isn’t public.

Losing Customers

The retailer has lost customers and market share to discounters such as Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT), which are attracting budget-minded consumers.

On Dec. 27, Sears tumbled the most in 8 1/2 years after saying it will close as many as 120 stores. Same-store sales fell 5.2 percent in the eight weeks ended Dec. 25, Sears said last month.

The company is allowing other retailers to sell its DieHard, Craftsman and Kenmore products, including deals with Costco Wholesale Corp. (COST) and Ace Hardware.

Sears is scheduled to report fourth-quarter earnings on Feb. 23.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net

To contact the editor responsible for this story: Kevin Orland at korland@bloomberg.net

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