Will shuffling, spinoffs save Sears?

The inner workings at Sears Holdings Corp. are shifting, but it remains unclear if it will be enough to turn around sales and profits.

The owner of the Sears and Kmart retail chains acknowledged Monday it intends to reorganize into separate business units.

The Hoffman Estates-based retailer will designate a leader in each of its businesses and executive advisers to oversee performance, Sears spokesman Chris Brathwaite said.

However, further details were not offered Monday.

"I don't think this does much for their retail side," said Neil Stern, a retail analyst at McMillan Doolittle, a consulting firm in Chicago. "It's internal."

Sears Holdings owns valuable mainstay brands, including Die Hard batteries, Craftsman tools, Kenmore appliances and Lands' End clothing.

At established stores, sales have declined every quarter since billionaire Edward Lampert, 45, combined Kmart with Sears, Roebuck & Co. in 2005.

Profit margins probably will drop for a third straight quarter following two years of steady growth, Sears said last week.

The turnaround strategy has some retail analysts skeptical.

"They are talking about re-organizing around brands but I've never seen that before. They always revolve around profit centers," said Howard Davidowitz, chairman of New York-based retail consultant Davidowitz & Associates.

Sears, whose stock declined 39 percent last year in Nasdaq Stock Market trading, will give "greater control, authority and autonomy" to the individual businesses, Brathwaite said in a statement.

Sears Holdings, which closed Friday at $89.43, is down from its high of $195.18 in April.

Of seven analysts surveyed by Bloomberg, only one has a "buy" recommendation on Sears Holdings.

Lampert engineered the 2003 takeover of Kmart while it was in bankruptcy, and he later engineered Kmart's $12.3 billion acquisition of Sears, Roebuck and Co. to form Sears Holdings Corp.

Lampert's investment funds hold 48 percent of Sears Holdings' shares, according to Bloomberg.

In the months after Lampert said in August 2006 that the company may make acquisitions outside the retail industry, sparking speculation he would run Sears like a hedge fund, Sears shares gained 29 percent.

The most recent shift in strategy has some analysts speculating Sears Holdings may intend to sell its lucrative brands.

"I think this puts (Lampert) in a position to spin off these companies," said George Rosenbaum, president of Leo J. Shapiro & Associates, a retail consulting firm based in Chicago. "I think it could be an ingenious scheme, but it won't make any difference for the consumer in the short term."