Lacy Out as Sears CEO

Alan Lacy was replaced as CEO of Sears Holdings, and chairman Edward Lampert is assuming responsibility for marketing and merchandising.

Sears Holdings named Aylwin Lewis chief executive, effective Sept. 30. Lacy will stay on as vice chairman and focus on merger integration and strategy. Chairman Lampert, a hedge fund manager whose ESL Investments own 39% of Sears, will oversee marketing and merchandising at Sears and its Lands’ End division, a move that has been criticized as “micromanaging.”

Lacy was blamed for failing to revive Sears’ sales despite years of turnaround efforts. Sales slumped again in the latest quarter, dropping 7% at Sears’ stores open for at least a year.

On the plus side, second-quarter net income rose 5%, to $161 million from $154 million a year earlier.

Kmart total sales decreased 3% for the 13 weeks ended July 30. Total sales were negatively impacted by a reduction in the total number of operating Kmart stores. While Kmart’s same-store sales declined as a result of lower transaction volumes, some categories, such as apparel, had positive same-store sales.

Domestic Sears sales fell 3% for the quarter due to a 7% decrease in domestic comparable store sales though home services sales were strong. Sears improved gross margin by reducing reliance on certain promotional events and reducing inventory levels, which lowered merchandise costs.

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