One of the most candid takes on the surprise
Kmart merger with Sears Roebuck came from a slightly
dumbfounded analyst who, shortly after the deal, was announced
had the gumption to blurt out: "Two bad retailers don't make a
right." His second surmise was equally poignant: "Wal-Mart'll
still kill em'."
But ESL Investments chief Eddie Lampert seems to be running
ahead of the analysts as usual. And it's pretty hard to argue
with his track record. Lampert, an expert hunter in undervalued
names, has watched Kmart Holding Corp.'s stock rocket from a
bargain basement $22 per share at the start of the year to
about $108 after the Sears acquisition was announced. And, on
the day of the deal, Big-K's stock took a 7% jump.
Lampert helped put value back in the battered retailer by
pressuring an unwilling management for cost cutting and a
strategy aimed at drawing in...