The NY Times on Sears Holdings

http://www.futureofcapitalism.com/2010/12/the-ny-times-on-sears-holdings

The New York Times, in its business section, has a pretty egregious dispatch about Sears Holdings. A sample paragraph:

Five years after the merger, Sears Holdings is beleaguered, with sales markedly worse than its competitors'. The company's revenue dropped more than 10 percent from 2005 through 2009, the most recent full fiscal year. In the same time period, Wal-Mart's sales rose almost 31 percent, Target's more than 24 percent and Macy's about 5 percent. Sales at J. C. Penney's declined by about 6 percent.

Guess what happened to New York Times Co. revenues during this period? They plummeted to $2.4 billion in 2009 from $3.4 billion in 2005, a decline of 29%. Now, granted, the Times sold some things because it needed the cash to stay solvent. But still, for a company whose sales are down 29% to be criticizing another company because the other company's sales are supposedly down 10% is really something.

What's more, the Times article confuses change in sales with sales. These are two different things. While Macy's revenues may be up, at $25 billion a year, they are still a lot less than Sears Holdings' $43 billion a year. J.C. Penney's revenues are about $18 billion; again, a lot less than Sears Holdings.

What's more, what matters to owners of a company isn't as much sales or change in sales as profits.

The Times quotes a Credit Suisse analyst, Gary Balter, who is negative about Sears. Mr. Balter is a usual suspect for this work. He was quoted in a similar piece in Bloomberg Businessweek that ran in March; the Times article is just a pile-on. The other analyst quoted by the Times, Bill Dreher of Deutsche Bank, is another Bloomberg Businessweek retread. No one asks or says what sort of business, if any Credit Suisse or Deutsche Bank do with funds that are shorting Sears Holdings, or whether CS or Deutsche Bank itself have a position in, or do business with, companies that compete with Sears and that appreciate having analysts out criticizing the company.

Disclosures: I know and like some of the Sears Holdings people, though I haven't discussed the Times article with them, and I own some of the stock.

by Ira Stoll  |  Dec 22, 2010 at 11:44 am Related Topics:  Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list