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(CNN / KRON) – What's wrong with Sears? Amazon? Mismanagement?
Eddie Lampert, CEO and main shareholder, has another idea: these are the company's retirees.
Sears has released another quarterly quarterly earnings report, and Lampert is complaining about the billions of dollars that Sears owes to its former employees through retirement plans.
Lampert said Sears has contributed nearly $ 2 billion to pension plans over the last five years and $ 4.5 billion since the merger of Sears and Kmart in 2005 to form Sears Holdings (SHLD). The company pays retirees about $ 300 million a year, depending on the deposits.
If Sears had been able to put that money into its operations, "we would have been in a better position to compete with other large distribution companies, many of which do not have large pension plans," Lampert wrote in a post.
He also criticized the "very difficult" environment for retailers, but said Sears had been "significantly affected" by pension obligations.
Many other analysts have accused Lampert himself of Sears' woes. They say that he made bad marketing decisions, that he was not investing enough in the stores and that he had not committed to selling online .
The growing preference of Americans to buy online and in supermarkets rather than in malls is a major problem for the company. Sears has lost $ 11.7 billion since its last profitable year in 2012.
Lampert is right in saying that the company is at a disadvantage because it once benefited from traditional pension plans, which pay a fixed monthly benefit to retirees as long as they live.
Today, most companies offer what is called a defined contribution plan, such as a 401 (k) plan.
Sears terminated its pension plans in 2006, but employees and long-term retirees are still entitled to the benefits they have earned while the plans were in effect.
According to a federal regulator, Sears, once the largest employer in the country, estimates that 100,000 retirees still qualify for benefits under the pension plans. By comparison, the company had only 89,000 employees in February and many of them left the company because of the closure of stores.
Sears must make contributions to the pension plans according to the rules established by the Pension Benefit Guaranty Corp., which provides benefits to retirees whose corporations and pension plans go bankrupt.
When pension plans are severely underfunded or when a business risks going bankrupt, which is the case for Sears, the PBGC sets stricter rules.
For example, Sears is getting about $ 900 million by selling its Craftsman tool brand to Stanley Black & Decker (SWJ). As part of a settlement with the PBGC, Sears must pay approximately $ 250 million into its pension plans.
Sears is also trying to sell its Kenmore appliance brand, and Lampert has offered to buy $ 400 million through a hedge fund it controls. But no agreement has been reached. One of the reasons could be that Sears needs to enter into an agreement with the PBCG to determine what portion of the money will go to pensions.
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