Lampert confident in Sears' strategy

The chairman of Sears Holdings Corp. went on the defensive Monday, saying the troubled retailer's conservative approach to spending money will help it weather the nation's rocky economic outlook.

Hedge fund financier and billionaire Edward Lampert told investors that Sears' competitors have overextended themselves through a rash of store openings and debt acquisition.

"We do feel that because we're not building a lot of new stores, that we can do a better job with the assets we have in place," he said during the company's annual shareholder meeting at its headquarters in Hoffman Estates.

The retailer is in the midst of a high-stakes restructuring aimed at reconnecting with customers to reinvigorate slumping same-store sales, which have fallen for the past eight consecutive quarters.

Lampert, whose hedge fund owns a controlling share of Sears, reiterated his dedication to turning around the company's fortunes and does not want to sell it off bit by bit.

"We need to come up with bigger and better ideas," Lampert said.

Most of the company's cash has been used to pay down debt and buy back stock. At end of the fiscal year, Sears said it had about $1.6 billion in cash on hand -- far less than the $3.8 billion the company had last year.

Lampert called the company's strategy a sound, long-term investment, while acknowledging that 2007 was a year of poor performance for the company.

"2007 set us back," he said. "Our strategy is designed to ensure we have enough financial strength to weather whatever economic situation comes our way."

Sears is also searching for a new chief executive, after the company ousted Aylwin B. Lewis earlier this year.

Lampert said the CEO search was progressing, but offered no timetable for a permanent replacement.

"We're interviewing candidates and will continue until we find the person that we think is the right type of person to lead the company going forward," he said.

Lampert acquired Kmart in 2003 and Sears, Roebuck and Co. in 2005.

Kim Picciola, an analyst at Morningstar, said she expects to see the company beef up its online operations but acknowledged systematic problems with the Chicago area landmark company.

Also Monday, Lampert dismissed speculation that Sears would put some of its popular brands -- household names such as Kenmore, Craftsman and DieHard -- in the stores of its competitors.

He said that was just one of many options the company was considering.

Sears Holdings, the largest U.S. department-store chain, dropped $3.14, or 3 percent, to $100.08 in Nasdaq Stock Market composite trading. The shares have dropped 44 percent in the past year.

"We're far from where we need to be," Lampert said.