Global Economics

Eddie Lampert, Read 'Balter Shrugged'


Russian-American novelist Ayn Rand in New York, 1962

Photograph by AP Photo

Russian-American novelist Ayn Rand in New York, 1962

An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, Lampert created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.
—Mina Kimes, “At Sears, Eddie Lampert’s Warring Divisions Model Adds to the Troubles,” Bloomberg Businessweek, July 11, 2013.

I thought I knew what a mess Sears was. Then I read Mina Kimes’s tour-de-Kenmore on Edward Lampert. This must-read is the kind of must-read that you read, then ponder, then go back and reread.

I am assuming somewhere in the vicinity of October it will actually sink in how interesting, original and uniquely screwed-up the Sears/Kmart model is.

In the meantime, I consider Sears. Consider this.

Late in the story (call it “DieHard Management”), Kimes quotes Gary Balter of Credit Suisse. This is a stroke of Kimesian genius. It demands elaboration.

On the Street, there are a select few “analysts” that quietly, always quietly, rise above the mundane. Gary Balter is one of these.

For decades, Balter has committed trenchant analysis of retail companies. I recall (can it be 20 years ago) Gary inventing compare-and-contrast ratios that explained the internal inventory dynamics of a given firm. We read Balter to learn about the companies, but frankly more so to peer into the Balter process.

Kimes brilliantly gets Balter to find the one positive in this grim corporate tale: “‘They’re ahead of most retailers,’ says Gary Balter, an analyst at Credit Suisse (CS). ‘In a way, it’s frustrating.’”

There is not a moment to lose amid these turbulent times for Mr. Lampert. Once he memorized his Ayn Rand. Now he should best pick up the phone and dial 1-GAR-YBA-LTER.

Better yet, Mr. Lampert, read Balter Shrugged. Discuss.

Keene hosts Bloomberg Surveillance 7-10 a.m. ET on 1130 AM in the New York metro area and nationally on SiriusXM 113.

Steve Ballmer, Power Forward
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