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Bloomberg's Coleman-Lochner on Sears, Gordon on Clinton (Audio) · Bloomberg Intelligence

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  Speaker 1: I'm Charlie Peblett, and that's a Bloomberg Business flash. This
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  Speaker 1: is taking stock with Pim Box and Kathleen Hays on
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  Speaker 1: Bloomberg Radio. Sears Holdings. What is left of Sears Holdings
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  Speaker 1: after the CFO departs and Eddie Lampert, who controls Sears Holdings,
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  Speaker 1: decides to perhaps put the brands of Ken Moore, die
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  Speaker 1: Hard and Craftsman on the auction block. Let's find out
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  Speaker 1: more From Lauren Coleman Lochner, retail reporter for Bloomberg News. Lauren,
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  Speaker 1: thanks very much for coming in. Much appreciate it. All right,
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  Speaker 1: so give us the news. Tell us what's going on. Sure, So,
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  Speaker 1: Sears for the last few years has been selling or
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  Speaker 1: spinning off assets. Um as it's been burning through quite
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  Speaker 1: a bit of cash. It's was more than two billion
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  Speaker 1: in cash burn last year. So they're just not funding
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  Speaker 1: the operations. Um they need to go to outside sources
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  Speaker 1: of money. The stores sales declining sales, UH, same store sales,
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  Speaker 1: which is a measure that we look at since it met,
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  Speaker 1: you know, it's like it's apples to apples. They've been declining.
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  Speaker 1: I think it's been every quarter but one since the
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  Speaker 1: company's merged. So operationally, they've had a lot of problems
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  Speaker 1: and they've tried a lot of things, but nothing that
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  Speaker 1: they've tried is really managed to turn the business around.
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  Speaker 1: So what is the problem here? I love the way
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  Speaker 1: you start your story today. You say, you know Sears
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  Speaker 1: chief executive officer Eddie Lampert is in a bad spot
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  Speaker 1: when he's considering selling off three of the retailer's crown jewels,
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  Speaker 1: Ken More Craftsman, and I heard, look, he's like cutting
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  Speaker 1: off the arms, arms and legs pretty soon. You know,
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  Speaker 1: what do you have left to stand on? Right? Because
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  Speaker 1: you have the licensing stream of revenue from those brands. Now, um,
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  Speaker 1: they did look a couple of years ago at exploring
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  Speaker 1: outside companies licensing the brands as well, but then you're
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  Speaker 1: giving people less of a reason to come into your
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  Speaker 1: own store. Worse, Sears is still the major appliance seller
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  Speaker 1: and Ken Moore is a big draw for customers. If
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  Speaker 1: you don't have that, it's you know, you could sell
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  Speaker 1: it in license at bat too. But if you don't
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  Speaker 1: have that, what do you have to bring people in there?
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  Speaker 1: Not coming in for clothing. That's not an area that
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  Speaker 1: they've been able to fix. They've been struggling on most fronts,
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  Speaker 1: most categories ever since the company has merged, and even
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  Speaker 1: before Sears and Kmart were merged, Lauren I was looking
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  Speaker 1: at the details of things like ken More products and
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  Speaker 1: so on. They're made by Whirlpool, ge Panissan. They don't
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  Speaker 1: make any of this, They just put their brand on it.
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  Speaker 1: Now they may have some unique features tea so UM,
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  Speaker 1: it's all contained in this special purpose vehicle, this k
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  Speaker 1: C D I P Intellectual Property LLC. Who do you
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  Speaker 1: think's gonna buy it? I mean, who would be interested?
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  Speaker 1: Husky Apex Tool Group makes some of the tools, so right,
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  Speaker 1: you might. You know. What's been suggested to me is
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  Speaker 1: that you might have manufacturers UM looking at some of
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  Speaker 1: these brands. UM. In terms of the tools, at least
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  Speaker 1: batteries is tough. It's really almost a commod commodity these days.
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  Speaker 1: UM as far as the appliances go. One thought has
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  Speaker 1: been that you could have a retailer like home Depot,
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  Speaker 1: which now has its own brands, but this would be
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  Speaker 1: a draw and it's a successful retailer, and that this
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  Speaker 1: could really revitalize the brands. Now, we don't know whether
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  Speaker 1: they're going to sell these, and Sears has put a
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  Speaker 1: lot of stuff on the block where you know it
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  Speaker 1: hasn't completed the transaction, or it's you know, done something
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  Speaker 1: different like spinning off the entity instead. So it's possible
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  Speaker 1: that nothing will happen as well. But Eddie Lamport will
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  Speaker 1: stay in his seat running the company and just keep
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  Speaker 1: selling things off until there's nothing left to sell. Is that? Oh?
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  Speaker 1: They you know, they're they're really emptying the shelves here. Um,
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  Speaker 1: there isn't a lot left. There are a lot of
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  Speaker 1: stores still left. They only put about two fifty into
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  Speaker 1: the into the red that they spun off last year,
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  Speaker 1: but those were two fifty of their best stores. They
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  Speaker 1: have some other stores pledged um already, so the value
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  Speaker 1: of the remaining real estate is probably not as strong
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  Speaker 1: as what's already been spun or pledged elsewhere. Well, um,
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  Speaker 1: we'll see what happens next. I'm sure you'll be back soon.
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  Speaker 1: Though it seems like this is the story. Is that
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  Speaker 1: the plot is thickening, So it seems Lauren Colemanlauter, thank
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  Speaker 1: you so very much for joining US retail reporter for
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  Speaker 1: Bloomberg News, reporting on Stears plans to considering options for
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  Speaker 1: Ken Moore, Craftsman, and die Hard, some of its most
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  Speaker 1: iconic brands, to politics. We go taking a look at
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  Speaker 1: some of the comments that the President Obama made at
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  Speaker 1: the G seven meeting in Japan about Hillary Clinton's emails,
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  Speaker 1: also about Donald Trump. Craig Gordon joins us now managing
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  Speaker 1: editor for Bloomberg Editorial in Washington. Craig, Welcome to the show. Hey,
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  Speaker 1: thanks for having me so, uh, you know, it's interesting.
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  Speaker 1: I think people were waiting to hear the president asked
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  Speaker 1: at that press conference today some questions about G seven
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  Speaker 1: ministers and economies, but a lot of political questions. What
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  Speaker 1: did you make about his comments on Hillary Clinton's emails.
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  Speaker 1: I mean, look, this has been an uncomfortable topic for
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  Speaker 1: the Obama administration. I think they know what that report
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  Speaker 1: says that she obviously did not really follow the rules
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  Speaker 1: and actually took some steps that we now know from
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  Speaker 1: this report where she cut some corners for the sake
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  Speaker 1: of privacy, for the sake of her emails not being
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  Speaker 1: archived for all eternity and different things. This is not
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  Speaker 1: something that President Barack Obama really wants to stand up
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  Speaker 1: there and have to defend and have to, you know,
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  Speaker 1: sort of answer for, because it really he has said
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  Speaker 1: in prior things that he did not he would not
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  Speaker 1: have done it this way he had wished, you know,
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  Speaker 1: says she could have done it differently. So it puts
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  Speaker 1: Obama in a very tough spot. Obviously, he's a loyal Democrat.
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  Speaker 1: He would like Hillary Clinton succeed him versus Donald Trump.
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  Speaker 1: So he has to walk a very fine line. But
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  Speaker 1: I don't think the White House is enjoying having to
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  Speaker 1: defend email practices by Hillary Clinton that they actually don't
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  Speaker 1: agree with themselves. Craig, can you comment on Bernie Sanders
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  Speaker 1: and what he's trying to do with the convention committee
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  Speaker 1: and the various platforms that the Democratic Party will have
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  Speaker 1: to adopt. Yeah. Sure, I mean, look at every national
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  Speaker 1: political convention, each party adopts a party platform that is
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  Speaker 1: supposed to be sort of the guiding principles, the bedrock
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  Speaker 1: principles of that political party. Um, Bernie Sanders, you know,
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  Speaker 1: I think even Bernie Sanders is that he's a little surprised.
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  Speaker 1: And when he started running for president, he really was
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  Speaker 1: just trying to influence the conversation. He was trying to
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  Speaker 1: pull the party towards the left, toward the liberal side
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  Speaker 1: of the spectrum. Um in the eventual nominee, of course,
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  Speaker 1: he ended up coming much closer to winning than even
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  Speaker 1: he might have expected. But at the end of the day,
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  Speaker 1: this always was about getting more progressive policies into the
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  Speaker 1: party conversation and eventually into the party platform. Things like
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  Speaker 1: a fifteen dollar minimum wage nationally, things like you know,
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  Speaker 1: fully paid college, things like fully paid healthcare. And so
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  Speaker 1: right now, look, you know, Hilly Clinton is within a
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  Speaker 1: hundred delegates of being the nominee. The Democratic Party officially
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  Speaker 1: shall clear that bar easily in California and June seventh, um,
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  Speaker 1: So Bernie Sanders at this point, you know, he can
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  Speaker 1: say he's still in the race a little bitter end,
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  Speaker 1: but he But can he influence the platform perhaps in
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  Speaker 1: foreign policy? Uh, that's a little trickier. I think he
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  Speaker 1: I think he is mostly interested in the domestic policies.
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  Speaker 1: I think he's mostly interested in trying to get the
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  Speaker 1: Democratic Party to be the Democratic Party, perhaps the FDR,
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  Speaker 1: you know, sort of that that old that thing where
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  Speaker 1: the government is truly providing for people a living wage, healthcare, education,
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  Speaker 1: all of those things. He has talked less about foreign
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  Speaker 1: policy doing the campaign, just by nature of it. But
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  Speaker 1: he so his money focuses on domestic and I think
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  Speaker 1: you will see a Democratic Party platform that sounds a
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  Speaker 1: lot like Bernie Sanders party platform because frankly, it doesn't
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  Speaker 1: really cost Hilly Clint anything to have it in the platform,
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  Speaker 1: and nobody, we blunt, nobody really reads the platform. After
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  Speaker 1: the conventions over, Bernie can declare, when Clinton can declare,
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  Speaker 1: she kept Bernie happy and hopefully Bernie supporters come onto
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  Speaker 1: her side. That would be the ultimate endgame failure Clinton.
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  Speaker 1: Some interesting comments from President Obama when it comes to
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  Speaker 1: Donald Trump, and of course Trump saying today he'd be
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  Speaker 1: delighted to debate Bernie Sanders. Uh. Donald President Obama saying
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  Speaker 1: that world leaders are rattled by the prospect of a
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  Speaker 1: Trump presidency, and Donald Trump shoots back that it's good
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  Speaker 1: to be uh rattled in a friendly way. Were you
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  Speaker 1: surprised to hear the president speaking this way of Trump,
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  Speaker 1: although you know he is sitting down with leaders from
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  Speaker 1: all over the world. Yeah. And it's interesting because a
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  Speaker 1: lot of our Bloomberg reporters and editors, we we sort
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  Speaker 1: of get these reports back in Washington that they'll go
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  Speaker 1: interview off in the CEO or the kind of folks
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  Speaker 1: that Bloomberg obviously would interview and they all are a
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  Speaker 1: bit of gas that was happening in America. They're sort
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  Speaker 1: of puzzled and looked to our reporters to try to
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  Speaker 1: explain it, and and even some of us in Washington
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  Speaker 1: are still trying to explain to ourselves. So I'm not
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  Speaker 1: surprised that that sentiment is out there, and nor am
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  Speaker 1: I surprised that Barack Obama's talking about it. Um. I
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  Speaker 1: actually think that he is. Um. He is sort of
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  Speaker 1: frustrated that what he thinks has been some bridges bridge
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  Speaker 1: building that he's done in his eight years in office.
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  Speaker 1: You know that it seems like Donald Trump is plating
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  Speaker 1: stick of dynamite under those bridges, and I think he's
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  Speaker 1: frustrated about that, And I think as he gets closer
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  Speaker 1: to the end of his term, he will feel, you know,
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  Speaker 1: freer and freer almost at every passing day to say
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  Speaker 1: that about Donald Trump. He's made comments like this before.
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  Speaker 1: This is obviously a very high profile international setting, so
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  Speaker 1: it's a little bit unusual maybe to hear the president
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  Speaker 1: talk about domestic politics and a foreign trip. But no,
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  Speaker 1: I think he's made it very clear that he is
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  Speaker 1: troubled by Trump. He is worried that he will diminish
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  Speaker 1: US influence in the world and actually damage, you know,
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  Speaker 1: damage our prospects abroad. That that's Barack Obama's opinion. He's
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  Speaker 1: he's certainly entitled to it, and he feels more free
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  Speaker 1: every day to share it with us. Craig Gordon, thank
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  Speaker 1: you very much for sharing all this information with us.
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  Speaker 1: Managing editor, Bloomberg News, Washington d C. Bureau. You're listening
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  Speaker 1: to Taking Stock on pim Fox, my co host Kathleen Hayes,
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  Speaker 1: Craig Gordon speaking about Trump crossing the delicate threshold and
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  Speaker 1: Clinton emails and the fallout from that Inspector General report.
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  Speaker 1: This is Bloomberg Radio.