Sears chairman unhappy with 'inaccurate' outlook

NEW YORK , N.Y. Sears chairman Edward Lampert defended the retailer from what he called an inaccurate and biased report in the Aug. 24 edition of the Barron’s paper, according to Reuters.

Lampert was responding to a report that suggested Sears stock could fall 50% after extreme cost-cutting depleted its ability to generate cash flow needed to win back market share from rivals.

"The article exaggerates the extent of our cost-cutting in an attempt to make it appear that what we are doing is somehow extreme or unproductive," Lampert said, adding Sears is prioritizing spending and "reducing and reallocating certain expenses that those who are more conventionally focused might disagree with."

According to Reuters, the chairman also defended an amended credit deal, an amended partnership agreement related to his hedge fund ESL Investment, as well as possible store closings, which he said will generate cash and eliminate ongoing losses from operations.

The article was "misleading, inaccurate and poorly researched," Lampert said in the letter, published in Barron's Sept. 7 edition, which also defended Sears' quarterly reporting of "special charges" and EBITDA.

Jonathan Laing, who wrote the article, said in a reply on the same page that free cash flow is the best measure of the company's performance, on which score "Sears is losing ground."

Sears shares are down 15.4% since the company reported a surprise quarterly loss on Aug. 20, which, Reuters reported, dampened hopes Lampert could turn the company around. The shares closed at $62.38 on Friday.