sears 2013 annual meeting is sears in rocky territory ... · increased more than 8 percent last...

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—STRAIGHT TALK, Summer 2013—

Volume 16, Issue 1 Summer, 2013

S o me o n Wa l l S t r e e t s aw D’Ambrosio’s departure as adding to Sears risks, and pointed to his lack of retail sales experience just as the company is trying to turn around its core Sears and Kmart chains.

“Shop Your Way”Lampert talked about the steps the company was taking to drive more transactions as businesses such as books, music, greeting cards and photo services continue to decline.

Sears, he said, has focused on ef-forts such as its rewards loyalty program, “Shop Your Way,” with its millions of members, and has taken steps to shorten delivery times as it competes with Amazon.com. In

Sears Holdings continues to strug-gle to get a decent return on its assets despite improvements in customer service and the addi-tion of new mobile and Internet platforms, Chief Executive Eddie Lampert reported at Sears 2013 Annual Meeting last May.

Chairman Lampert said that Sears did not move fast enough to cut ex-penses in the wake of the financial crisis. “I’ve seen businesses, as there has been a recovery, adjust their cost model and come out of it stronger,” he said. However, “We haven’t done that in every case,” Lampert added.

“The level of profitability is still well below where it needs to be,” Lampert said. “We’ve got a lot of work to do.”

Standing AloneAs the press reported, this year Eddie Lampert stood alone. He faced shareholders for the first time as the company’s chief executive officer, as well as its chairman, majority shareholder and the engineer of the merger of Kmart Holdings Corp. and Sears Roebuck and Co. eight years ago.

Mr. Lampert used this year’s annual meeting to reassure investors that he planned to build on the foundation laid by the former CEO to turn around Sears Holdings. Lampert added the title of CEO in February after Louis D’Ambrosio abruptly stepped down from that role due to a family member’s health issue.

Sears 2013 Annual Meeting

Is Sears in Rocky Territory? Chairman Lampert says: “We’ve Got a Lot of Work to Do.”

This issue of STRAIGHT TALK:Sears Annual Meeting p. 1Sears New Strategy p. 4Washington, D.C. Area Club p. 5Humor In the Court p. 5Can Sears Plan Survive? p. 6A Tale of Two CEOs p. 7Sears Super World Record p. 8Veterans Pension p. 9Chairman’s Page p. 10The Onion/Right or Wrong? p. 11

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Chairman Eddie Lampert, tilling the retail soil, looking for the elusive profitability.

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fact, the company has reduced shipping times for online orders to two days from five days and allows customers to ship items to stores.

Lampert emphasized the importance of the company’s three-year–old “Shop Your Way” program and said that members accounted for 60 percent of the company’s overall sales last year. Sales per member increased more than 8 percent last year, compared with a 4.1 percent drop companywide.

“We are becoming a company fo-cused less on products and less on stores and much more on mem-bers,” Lampert said.

Since the beginning of last year, Sears has sold stores, spun off its smaller-format locations and a por-tion of Sears Canada, and formed a new unit to develop entertainment-linked brands, including clothing lines by “The Voice” Adam Levine, and singer Nicki Minaj.

Needs to ImproveDespite those efforts, Sears lost $930 million last year, though that was narrower than its $3.1 billion loss the year before. Lampert told the approximately 300 attendees at the meeting that the company still needs to improve. “We know that the level of profitability is still well below what it needs to be to justify the assets we’ve dedicated to the business,” he said.

Lampert said the company would be more aggressive about some of its plans if it had the resources. Sears operations consumed $571 million in cash in the past two years. “If we were making more money, we could go much faster.” he said at a press conference following the shareholder meeting. “We’ve

had to make choices I’d prefer not to make.”

As an example of such choices, Lampert has been criticized for spending less on store upkeep than competitors. However he has tied the company’s problems to the changing habits of shoppers, who are buying their goods online or using their mobile phones to make purchases. Sears also has lost ap-pliance sales to big-box competitors such as Home Depot and Lowe’s.

When hedge fund manager Lampert created Sears Holdings in 2005 by merging Sears, Roebuck and Kmart the deal was hailed as shrewd at the time, in part due to the value of the companies’ real estate holdings, but the chains themselves have per-formed poorly. Sears Holdings sales have fallen by more than $6 billion since 2008, to $39.9 billion in the year that ended February 2.

Despite these losses, investors at this year’s Sears annual meeting voiced little dissent and offered ample praise for Lampert and his solo performance.

“I am so happy to see you as chief executive officer,” an elderly female investor from Texas told Lampert at this meeting. “Sears needs to be sizzling because it is hot.”

Integrated SalesHalf of the company’s online busi-ness now comes from what Sears calls “integrated retail,” which implies the combination of bricks and mortar and the Internet. In other words, you can buy online and pick up in the store, or order in

a store and have the goods shipped to your home.

While Amazon.com may be the leader in Internet sales, Sears Hold-ings is recognized to be the leader in “integrated sales” with a 25 per-cent increase in the fourth-quarter holiday season and 17 percent last year overall. In addition, the com-pany was declared to be #1 in New Tablet and Mobile capabilities by the Internet Retailer Magazine.

Lampert laid out a strategy called “Member Assist” where in-store em-ployees give shoppers free product advice and assistance through an app on their mobile devices, sug-gesting goods to buy at the store or online.

This program is a way for associ-ates who are physically in the stores and are familiar with products to embrace the growing desire for shoppers to research products online. Member Assist started on April 1 and is in about 400+ stores, mostly Sears locations.

When asked about expanding the program, Lampert said, “If we were making more money, we could go much faster.” He said it was too soon to say what effect Member Assist is already having and could potentially have on sales.

Morningstar analyst Paul Swinand, who attended the meeting, said that “Everything was sort of ‘ooh and ahh’ but I didn’t get any numbers.” While Lampert appears to be think-ing about things the right way, “I didn’t get a lot of the meat behind it,” Swinand said.

Lampert said that he continued to believe in the viability of both Sears

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and Kmart. The company will keep looking for the right opportunities to sell its brands such as Craftsman tools in other locations—perhaps internationally or at other online retailers—in ways that do not hurt its own sales, he said.

The company has been “very, very deliberate” in the way it has made its investments, Lampert said, add-ing that if the company made more money, it could be more aggressive overall. “We believe we can win through service,” Lampert said.

Miscellaneous RemarksThe company is committed to fund-ing pensions. In fact, Lampert made this point near the beginning of his presentation.

There will be no extraordinary debt refinancing until 2018. Sears Hold-ings is in a good cash flow position.

Lampert has no desire to close stores other than what is necessary to fix the business. He said that he has expert real estate staff in-house to monitor this issue.

The company has R & D centers on the west coast and in Tel Aviv, Israel. Their primary goal is to continually improve Internet operations.

Lampert said that Sears Holdings is well ahead of the curve on Obama-Care implementation in 2014. The company is fully insured through health exchanges. He said that there is no problem for Sears to operate in this environment.

Editor’s NotE: The above article was assembled from reports of our own representative at the an-nual meeting, Bill Barker, and also news reports from the Dow Jones Newswire, Reuters U.S. Edition, and the Daily Herald (suburban Chicago, IL).

N.A.R.S.E. Presentation at Sears Holdings Annual Meeting

on Wednesday May 1, 2013Good morning. My name is Bill Barker. I am a Sears retiree and mem-ber of the Board of Directors of N.A.R.S.E., the National Association of Retired Sears Employees, which has represented retirees nationwide for the past 15 years.

Less than a year ago a number of N.A.R.S.E. Board members had the pleasure of meet-ing with several Sears Holdings executives for a “meet and greet” session and to out-line a number of retiree concerns. One of these concerns was providing all retirees with their exact amount of paid-up group life insurance coverage.

Stan Aldis, your senior manager of bene-fits recently informed us that he is working with Prudential Life Insurance on this group life insurance mailing which should be sent out in late May or early June. We thank you. We hope that Sears can give us assurances that funds have been set aside to honor this group life insurance commitment.

Another concern was extending the hours for Sears Family & Friends events. On March 10 of this year, the Family & Friends special event savings was extended all day. This is especially important for those retir-ees who usually do not travel in the evening hours. Another “thank you” to the company for extending the savings for this event to all day!

We sincerely hope that this positive dialog with Sears Holdings will continue with our organization. N.A.R.S.E. is still strong and is the primary representative of thousands of retirees nationwide.

As we told you last year, we want Sears Holdings to not only survive but to prosper in this very competitive retail environment. All of the company’s shareholders, many of whom are retirees, need to know how you intend to transform the company to deliver “wow” experiences to Sears customers.

Every year at these Annual Meetings you set forth your vision for the company. Of the tens of thousands of Sears Holdings shareholders, just several hundred attend these meetings.

In the future, would you consider streaming live over the Internet the entire Sears Holdings Annual meeting? This would give all sharehold-ers an opportunity to hear first hand your thoughts on positioning the company to compete effectively in the 21st century.

Such action would go a long way to improving corporate transparency to the ex-tent that the company’s actions are observable to all interested shareholders.

Thank you.

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BiLL BarkEr

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Sears Holdings Corp. has hatched a plan to transform some of its shuttered stores into data centers, disaster relief centers and even cell phone towers.

The Hoffman Estates-based company said the plan is part of its broad-er effort to redevelop an undisclosed number of Sears and Kmart loca-tions. In March, Sears launched a new business unit, Ubiquity Critical Environments, helmed by former Chicago Mi-crosoft executive Sean Farney, 43, to oversee the new strategy.

This new business unit’s name refers to the scope of Sears portfolio: 71 per-cent of the U.S. population lives within 10 miles of one of Sears buildings.

According to Sears spokesman, Howard Riefs, Ubiquity stands for “the breadth of Sears Holdings real estate operations and the range of opportuni-ties it creates.” He added “We recently established (the unit) to re-develop properties within our portfolio that are no longer in use as retail stores.

Sears vast North American real estate portfolio has suffered in an increasingly e-commerce world. So the company decided to convert some closed and underperforming stores into a variety of non-retail centers, a symbol of the shift away from the brick-and-mortar and mail-order retail sales that it once dominated.

The first Ubiquity initiative will be at the Sears store in Chicago’s south side on 79th Street. The 127,000-square-foot store is scheduled to close

in July and will be transformed into a multiple-tenant data storage site.

Mr. Farney said that he was drawn to the challenge of executing a 21st-century plan at a 127 year-old

company trying to find its way. “It’s visionary and out of the box,” he says, who leads a staff of four.

Most of the data centers will be in closed Kmart stores, according to Sears officials, as they tend to be on standalone properties that provide more privacy for tenants.

Open mall-based stores with un-derutilized floor space will be used for business continuity services, which provide companies with the ability to maintain continuous op-erations of technology and people in the event of natural disasters, civil disruptions and other unforeseen occurrences, said Mr. Riefs.

"It's more of an opportunity to use a small number of real estate assets and transform them into a unique usage," said Sears spokesman How-ard Riefs. "It’s a matter of having excess property and trying to create value for the company," he added.

As reported in Crain’s Chicago Busi-ness May 13, 2013, “Alternative uses

for real estate won’t, on their own, save a corporation that lost $930 mil-lion in fiscal 2012. But if the plan is executed effectively, Sears could add much needed income.”

Rick Kurtzbein, a re-search ana lyst who covers data centers at New York-based 451 Re-search LLC, says that Sears has “found a cre-ative way of adding to their revenue stream and their profitability.”

Mr. Kurtzbein pictures the large, freestanding Sears his family shopped at when he was growing

up in Minneapolis. “It seemed like a concrete, fortified building that was an impressive structure,” he says. “Using that one example, I could see that building being repurposed.”

But he thinks the idea has limitations, saying, “The viability of converting to data centers in shopping centers would be questionable at best.”

Sears Holdings, which has seen sagging sales since 2006, lost $279 million in its most recent quarter. Last year, it closed a total of 110 Sears and Kmart stores. The company has closed more than 330 stores since 2010, according to SEC filings.

Editor’s NotE: The above article was assembled from a May 29, 2013 Dow Jones Newswire; a Chicago Tribune reporter, Corilyn Shropshire story in the May 31 issue; and an article about Sears new path for e-commerce in the May 13, 2013 issue of Crain’s Chicago Business.

Sears New Strategy for its Closed and Weakest Stores

Chicago’s 79th Street Store.

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Sears Retiree Club of the Washington, D.C. Area

Pictured left is a photograph of the May 23 meeting of the Sears Retiree Club of the Washington, D.C. Area. Jerry Hazlett took the picture.

The club has about 30 paid members and holds its meetings at the American Legion, 6520 Amherst Ave., Springfield, VA 22150. The date for the club’s next meet-ing will be December 5, 2013.

For more information about the club, its meetings and activities, contact Tom Nally, the club’s president. He can be reached by phone at 703-451-5358; or e-mail him at [email protected].

We would like to know what your club is doing. Just send us information and, as available, pictures, and we will publicize your club in a future issue of STRAIGHT TALK. Details about your retiree club can be e-mailed to Ron Olbrysh at [email protected]; or mailed to him at 624 E. Central Ave., Lombard, IL 60148-4032.

From leFt to right: Bob Smith, Carol Browning, Andy Pajewski, Pat Settle, Connie Bowe, June Hazlett, Joe Pascale, Roby Sheppard, Don Bisbee, Rich Bailey, Maureen Grobe, Tom Nally, Jerry Hazlett, Woody Woodard, Joe Jackson and Ken Moura.

Believe it or not, the following conversa-tions are f r o m a

book entitled Disorder in the Amer-ican Courts, and are exact quotes from attorneys and witnesses as published by court reporters.

attorney: What gear were you in at the moment of impact?witness: Gucci sweats and Reeboks.

attorney: Now, doctor, isn’t it true that when a person dies in his sleep, he doesn’t know about it until the next morning?witness: Did you actually pass the bar exam?

attorney: The youngest son, the 20-year-old. How old is he?witness: He’s 20, much like your IQ.

attorney: So the date of conception of the baby was August 8th?witness: Yes.attorney: And what were you doing at that time?witness: Getting laid.

attorney: How was your first mar-riage terminated?witness: By death …attorney: And by whose death was it terminated?witness: Take a guess.

attorney: Can you describe the individual?witness: He was about medium height and had a beard.attorney: Was this a male or female?witness: Unless the circus was in town, I’m going with a male.

attorney: Doctor, how many of the autopsies have you performed on dead people?

witness: All of them. The live ones put up too much of a fight.

attorney: W h a t i s y o u r d a t e of birth?witness: July 18th.attorney: What year?witness: Every year.

attorney: Were you present when your picture was taken?witness: Are you shitting me?

attorney: Is your appearance here this morning pursuant to a de-position notice, which I sent to your attorney?witness: No, this is how I dress when I go to work.

attorney: Are you sexually active?witness: No, I just lie there.

Attorney/Witness Missteps—Humor in the Court

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Some analysts have said that Sears most recent quarter was a disaster. On a year over-year basis, revenue dropped by about 10 percent, gross margin declined, and the com-pany posted an operating loss of $247 million.

Shares of Sears stock plunged May 24 after the company reported an unprofitable quarter. At its current burn rate, the company could run out of cash within a year.

As of May 4, the company had only $481 million of cash, down from $618 million just three months prior. Projecting this out, the com-pany could be expected to run out of money within four months.

However, that’s probably not likely to happen. Sears insists that it’s working to raise additional capital: specifically, it’s looking to sell off its warranty program (“Sears Pro-tection Agreement”). If successful, that sale could raise $500 million or more.

“The Sears story is similar to the J.C. Penney story,” said Jon Sablow-sky, head of trading at Brownstone Investment Group in New York, which trades Sears debt. “You have a mediocre retailer which is fortu-nate to own a lot of real estate. But if they sell all the assets and aren’t able to turn the business around, that’s when the music stops.”

Sears used up $773 million of cash in the last three months, the most

for a first quarter since at least 1995, bringing its deficit to $1.32 billion over the past year. That’s about $200 million wider than J.C. Penney’s shortfall and makes Sears the U.S. department store closest to exhausting its cash.

Sears spokesman Chris Brath-waite declined to comment on the cash balance.

Sears Appliance ExposureGiven the ongoing recovery in U.S. housing, one might have expected Sears to perform better in light of its appliance exposure since the company owns the iconic Kenmore brand. Building or remodeling a new house often requires the pur-chase of new appliances.

But on Sears most recent 10K, it blamed declining comparable store sales partly on appliances. Perhaps Sears is losing ground in this cate-gory to stores like The Home Depot, and Best Buy.

Turnaround StrategyOne way that Sears Holdings Corp has tried to build loyalty among its customers is with its Shop Your Way Rewards program, which is paying off somewhat, but has not been quite as successful as the company hoped for.

One area where Sears has really struggled is online, as it tries to compete with such companies as Amazon.com, Inc. Recently, Sears has been putting added emphasis

on its third-party features on its sears.com website, with several options for outside retailers to sell their products on the compa-ny’s website.

The challenge remains for CEO Edward Lampert, who is Number 68 on the Forbes list of 400 Richest Americans, to convert the com-pany’s renewed focus on its most productive brands and store loca-tions into any kind of a turnaround. Something needs to happen soon, as revenues have been declining at a frightening pace and continue to do so.

“Eddie Lampert … sitting on a ton of real estate assets, is not going to let the company go bankrupt because that will destroy Eddie Lampert,” said Howard Davidowitz of Davi-dowitz & Associates Inc., a retail consulting and investment banking firm based in New York. “There is no risk of default anywhere.”

Editor’s Note: Wall Street, financial commentators, and other pundits have been extremely harsh and negative about Sears Holdings per-formance ever since its merger with Kmart in 2005. The above factual/opinion piece was assembled from some recent reporting based upon two “The Motley Fool in News” articles dated May 21 and June 3, 2013; and a Bloomberg News article by Victoria Stilwell dated June 2, 2013.

Just a Thought

Can Sears Turnaround Plan Survive Its “Cash Burn” Rate, Unprofitability,

and Operating Losses?

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(Edited from a column by “Joe Ca-hill on Business” in the March 4, 2013 issue of Crain’s Chica-go Business.)

Eric Lefkofsky, age 43, and Edward Lampert, age 51, have more in common than their initials. Quarterly earnings meltdowns at Groupon Inc. and Sears Holdings Corp … provided fresh evidence that both men are running companies that need a new strategy pronto.

Mr. Lef kofsky’s Groupon and Mr. Lampert’s Sears won’t be around for the long term if current trends continue.

The ParallelsBut the parallels run deeper than red ink and plunging stock prices. Both companies sprang from the vision of f inanciers—the afore-mentioned Messrs. Lefkofsky and Lampert—convinced they could redefine markets and craft innova-tive business models.

Mr. Lampert merged Kmart Corp. with Sears, Roebuck and Co. and abandoned many traditional retail-ing precepts.

Mr. Lefkofsky, for his part, spied what he later called a “wildly profitable” business in an online fund-raising site created by free-lance computer programmer and musician Andrew Mason.

Control of large blocks of stock has enabled the two to stage-manage their companies from behind the scenes, turning CEOs into mere front men, and in Mr. Mason’s case, the eventual fall guy for Groupon’s failings. Mr. Lefkofsky, in March 2011, was named by Forbes as one of the year’s new billionaires.

Now, they’re both taking direct, day-to-day control at a time of crisis. Mr. Lampert, Sears chairman since the Kmart merger in 2005, added the CEO title earlier this year when Louis D’Ambrosio stepped down due to “family health matters” after less than two years in the job.

Mr. Lefkofsky, Groupon’s executive chairman, joined fellow director Ted Leonsis in a newly formed office of the chief executive after firing Mr. Mason last week.

Similar StrategiesMost striking is the similarity of the strategies they are pursuing to turn around their failing enterprises. Both are pinning their hopes on Internet retailing. Mr. Lampert has shifted investments from brick-and-mortar stores to Sears’ website.

Mr. Lefkofsky is turning Groupon’s focus to on-line merchandise sales as its original business of emailing daily deals on everything from res-taurant meals to skydiving lessons loses steam.

Their chances of success look equally slim. On-line merchandis-ing would have been a smart move 15 years ago, before Amazon.com Inc. established itself as the domi-nant Internet retailer.

King AmazonNeither Sears nor Groupon has the resources or expertise to beat Amazon at its main game: selling a wide assortment of products at the lowest possible prices. In that business, the only thing slimmer than the profit margins is the margin for error. It’s not a game for moonlighting hedge-fund managers or venture capitalists.

So far, Sears’ website hasn’t made a dent in Amazon or distin-guished itself from dozens of other retail sites. Over at Groupon Goods, meanwhile, the random assortment of stuff resembles Overstock.com, which is no profit-spewing jug-gernaut.

Find Your NicheThe best hope for Sears and Grou-pon is to carve out a profitable niche where they enjoy a competitive advantage. Finding such a niche requires retailing savvy neither Mr. Lefkofsky nor Mr. Lampert has demonstrated.

They also lack the managerial and operational expertise required for their new roles. And we’ve already seen the results of their strategic thinking. Mr. Lampert saw an untapped treasure trove in Sears’ vast real estate holdings, while Mr. Lefkofsky thought Groupon’s email list would throw off gushers of cash.

But like them or not, we have to root for Messrs Lampert and Lefkofsky. Few companies are as closely as-sociated with Chicago as Sears and Groupon. One has been a lodestar

A Tale of Two CEOs—Time Is Running Out

Eric LefkofskyEdward Lampert

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The 566 Sears Holdings associates dressed as Superman on June 5, 2013, at the company’s headquar-ters, were determined to break the world record for most people dressed as the Man of Steel in the same place. And they did! The old record was 437 people, held by Nexen Inc. in Calgary, Alberta.

It’s safe to say Hoffman Estates was the safest city in Illinois on June 5, if not the world. That’s because the Sears headquarters broke a Guin-ness World Record for the largest number of people assembled in one place dressed as Superman.

They weren’t faster than a speeding bullet or able to leap tall buildings in a single bound, but the par-ticipating Sears associates at the company’s headquarters were—as of June 5, 2013—record breakers.

Setting the record was one of the several publicity events staged by Sears in advance of the hotly antici-pated “Man of Steel” blockbuster. The company teamed up with War-ner Brothers, the studio behind the “Superman” reboot, ahead of the June 14 release.

Sears plays a prominent role in the film, according to ABC-TV Chicago. The movie will feature Kenmore and Craftsmen products. “Superman’s father uses Craftsman tools and works at a Sears,” said Ron Boire, executive VP of Sears and K-Mart.

The stunt, a celebration of Sears’ brand placement in this movie, required working with Warner Bros. Pictures and costume-maker Rubie’s Costume Co. to design and create 600 of the official uniforms worn by British actor Henry Cavill,

who plays Superman in the film. Associates were allowed to keep the costumes.

According to a Sears statement, “pivotal scenes” in the movie, are

shot inside a Sears store. Members of Sears’ Shop Your Way rewards pro-gram will receive access to sneak peeks and promotional products.

A SuperheroAs reported by a suburban Chicago newspaper, when Ryan Sherwood saw an email from Sears asking as-sociates to dress up as Superman, he said his participation was mainly about helping the company make it into the Guinness World Records.

Ryan Sherwood has read comic books his whole life and has written two novels in the magical realism genre, but Wednesday was the first time he actually got to be a superhero.

At 11:30 a.m., the 566 Supermen and Superwomen gathered in the main atrium of the company’s Hoff-man Estates headquarters.

“We brought together two iconic American brands: Sears and Su-perman,” company spokesman Brian Hanover said.

To qualify, each costume had to feature red boots, a blue body suit, a yellow belt, and the signature Super-

man “S” and a red cape, said Philip Robertson, Guinness World Records adjudicator, who came to the event.

Each Sears Holdings participant was dressed in the same one-piece cloth suit, red cape and red boots in order to meet the guidelines.

Each Superman had to check in so Robertson and Sears moderators could get the correct count. The group had to stand in place for five minutes for verification before be-ing awarded the Guinness World Records certificate.

Nancy Beyer, another Sears employ-ee, said she’s a Superman fan but thought the gathering would be fun for anyone—superhero lover or not.

“This is definitely one off the bucket list,” said Beyer, category manager of IT procurement at Sears.

“In the film, Superman catches a locomotive and is thrown into a Sears store,” Hanover said. “And Superman’s Earth mom, Martha Kent, works at Sears.”

The cape-clad and blue-suited par-ticipants said the gathering was successful, but Sherwood had one complaint as he pointed out sides of his costume.

“It was pretty fun, except Super-man really needs pockets for his cell phone.”

Editor’s Note: This news account was created based upon articles appear ing in the Daily Herald (Suburban Chicago), June 5, 2013 by Mackenzie Dye; The Huffington Post; Comic Book Movie.com; and ABC-TV News.

Sears Associates Set a ‘Super’ World Record at Headquarters

Superheroes with the Guinness World Records certificate.

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Many of our retirees are veterans. Are you entitled to a VA pension? Set forth below are some VA pension facts, farces and pitfalls. Let’s first start with the facts.

The VA helps Veterans and their families cope with financial chal-lenges by providing supplemental income through the Veterans Pen-sion benefit. Veterans Pension is a tax-free monetary benefit payable to low-income wartime Veterans.

EligibilityTo gain entitlement, the Veteran must be discharged under other-than-dishonorable conditions, have wartime service (defined as a period of war as set forth by the U.S. gov-ernment and VA), and must be:

Age 65 or older, • ORTotally and permanently disabled, • ORA patient in a nursing home re-• ceiving skilled nursing care, ORReceiving Social Security Disabil-• ity Insurance, ORReceiving Supplemental Secu-• rity Income

Your yearly family income must be less than the amount set by Con-gress to qualify for the Veterans Pension benefit. If eligible, your pension benefit is the difference between your “countable” income and the annual pension limit set

by Congress. VA generally pays this difference in 12 equal month-ly payments

Veterans or surviving spouses who are eligible for VA pension and are housebound or require the aid and attendance of another person may be eligible for an additional mon-etary payment.

How to ApplyTo apply for Veterans Pension, fill out and submit the Form 21-526 Veteran’s Application for Compen-sation and/or Pension.

You can access this form by:

Downloading it at http://www.• va.gov/vaforms/Calling VA toll free at 1-800-827-• 1000 to have a claim form mailed to youVisiting your local VA region-• al office

The FarceAs set forth in the January 2013 issue of The American Legion, The magazine for a strong America. a VA pension is not a hidden govern-ment benefit” for which you need an attorney or financial planner to unlock the mystery. Do not fall vic-tim to a scam designed to take your money and deprive you of the pro-fessional assistance you and your dependents have earned through service to your country.

An accredited VA service officer can advise you on your entitlement. He or she can also walk you through the process of filing, following up, reviewing and challenging on le-gal grounds.

The PitfallsDue to the recession, more vet-erans and survivors are seeking assistance through the VA pen-sion program. Many entities have surfaced that try to convince those entitled to pensions that they will receive more professional and competent help by retaining the services of a “pension specialist” or attorney.

Simply put, if anyone proposes that he or his organization should be paid for providing veterans with services, he should not be trusted or utilized, according to Mr. Cajun Comeau, American Le-gion Department Service Officer, North Carolina.

Veterans have earned free assis-tance, and The American Legion, with their extensive veterans service officer network, stands ready to pro-vide competent, professional service free of charge to all eligible persons, according to Mr. Comeau.

Visit www.legion.org/serviceofficers to find an accredited service officer in your area.

According to The American Legion

A Veterans Pension Should Be No Mystery

Some Everyday Life Lessons:

You don’t drown by falling in the water. You drown by staying there.

Life is 10% of what happens to you and 90% of how you react to it.

Sometimes good things fall apart so better things can fall together.

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We again thank you for your past and present support of our retiree organization, which has been in existence for the past 16 years. Straight Talk, with informative ar-ticles about Sears Holdings, and other articles of general interest for our retirees, could not be printed and mailed without your support and the support of many others. In addition, our web site, www.narse.org would not exist

without your financial contributions.

N.A.R.S.E. ScorecardFor many years our retirees have requested Sears to update their insurance coverage. The last time the com-pany provided such information was in 2007. When we met with Sears last year we again requested such an insurance update. Stan Aldis, senior manager of benefits for the company informed us that he is working with Prudential Life Insurance on this group life insur-ance mailing which will be sent beginning July 15th.

Because of the size of this mailing, it will be stag-gered over several weeks but all mailings should be completed by the end of July. Also, with the mailing, Prudential will provide confirmation of the retiree’s current beneficiary on record as well as information on how to make changes or update the beneficiary records. We again thank Stan Aldis for all of his help in making this insurance coverage mailing a reality.

Bill Barker, a member of N.A.R.S.E.’s Board of Direc-tors, mentioned another retiree concern at the Sears Annual Meeting last May, but it bears repeating. For many years our retirees were concerned that the Family & Friends special event days were only held in the evening hours. We have asked Sears to consider extending these events to all day.

On March 10th the Family & Friends special savings event was extended to all day. This was a God-send to our retirees who normally do not travel in the evening. Again, we are very appreciative that Sears decided to extend the hours for these special events to the entire day.

We Aim to PleaseN.A.R.S.E. is your independent voice so please contact us with any concerns you may have about Sears Holdings, your benefits or any other matters of a general interest to the retiree population. For instance, would you be inter-ested in a column dealing with “Shopping Wise”? As an example, we could explore the pros and cons of extended warranties or any other topic of interest to you.

On page 5 of this issue we have an article entitled “Humor in the Court.” It has often been said that laughter is the best medicine. The purpose of humor is to entertain and is probably our modern day stress valve. We hope that “Humor in the Court” makes you laugh or at least puts a smile on your face.

Web Site UpdateOn our web site we have a link for a listing of known Retiree Clubs. Take a look to see if your club is listed, and if it is, is all of the information correct? If the in-formation is not correct, or if your club is not listed, let me know. My e-mail address is: [email protected]. This is the best way to keep in contact with your fellow retirees or to locate someone you may have lost touch with. For privacy reasons, N.A.R.S.E. cannot provide you with contact information on any specific retiree.

Renew NowIf you have not already done so, I am asking you to renew your N.A.R.S.E. membership now for 2013. Enclosed is a Mem-bership/Renewal Application form and mailing envelope.

If you have already renewed, then please pass the application form to someone who could benefit from membership in our organization. If you have any com-ments, suggestions or questions, you may contact me.

Our purpose for existence is to keep you informed on issues important to retirees and to be your inde-pendent voice to our company, Sears, Roebuck and Co., now known as Sears Holdings. Your continuing financial support keeps us going strong.

We need your support to continue our mission of commu-nicating with retirees, Sears officials, legislators, regulators, the media and the general public about all of our retiree concerns.

We are here to serve you so please let us know what we can do for you.

Ron Olbrysh, N.A.R.S.E. Chairman

Chairman’s Page

What Has N.A.R.S.E. Done for You Lately?

11


The above headline and pho-to appeared in the News in Brief section of The Onion, Issue 49–24, June 10, 2013. The article can also be found at www.theonion.com.

Over the years, The Onion has published articles about Sears. Some of the headlines for these satirical stories include: “Sears Extrem-ists Fly Plane into Willis Tower,” “Sears Holds its An-nual Back-to-Congress Sale,” “This Week in History: Sears Tower Constructed with Bold Challenge to God Engraved on Roof (1972),” “Breaking: Dow Futures Plunge on News That Bill Loughlin Has Entered Sears Express Checkout

Line,” and “U.S. Economic Recovery Resting on Man Currently Persuing Sears Power Tools Section.”

What is The Onion? It is an Ameri-can news satire organization. It is an entertainment newspaper and

a website featuring satirical articles reporting on inter-national, national and local news.

Its website, theonion.com amounts to an average of 7.5 million unique visitors per month.

The Onion's articles com-ment on current events, both real and fictional. It parodies traditional newspapers with stories, editorials, op-ed pieces and man-in-the-street

interviews, using a traditional newspaper layout and an edito-rial voice modeled after that of the Associated Press. Its humor often depends on presenting mundane, everyday events as newsworthy.

In Case You Didn’t Know

Ghost of Alvah Roebuck Enjoying the Hell out of Sears’ Decline

Are the Analysts Right or Wrong about Sears?ALERT: This issue of Straight Talk contains an abun-dance of negative comments about Sears Holdings from many retail analysts. This appears to be a common practice especially around the time of the company’s Annual Meeting.

Do you believe what these retail experts are saying? Are they right in their analysis of the company? Or are they wrong in predicting the demise of Sears? Or is the truth about the company’s future someplace in-between.

Is Sears Holdings really in a decline, as suggested in the satirical Onion article above? Can Chairman Lampert turn the company around? Read the article on page 6 about the company’s “cash burn” rate, unprofitability and operating losses.

Retirees remember Sears, Roebuck and Co. when it was the Amazon.com of its day, thanks to its com-

prehensive mail-order catalog and early expansion across fast-growing postwar suburbs.

Today, many retail analysts think Sears has been largely rejected by today’s shoppers in favor of newer chains with larger formats and better pricing, from Target, to Home Depot, to Kohl’s.

Many of these same analysts dislike the merchandis-ing tactics of Mr. Lampert and think he treats the company less as a pure retailer, and more like a bun-dle of assets that can one day be turned into cash.

For a household-name company with $5 billion market share, Wall Street firms largely shun Sears Holdings. Only four analysts cover the stock, none of them recommends that investors buy it, and two advise clients to sell.

However, it is often the case on Wall Street that when investors seem uniformly arrayed against a

continued on page 12

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of the local business community for more than a century. The other is our best-known tech company.

Both employ thousands in the Chicago area. Here’s hoping they’ll take a page from Warren Buffett, hire a real CEO and let him or her do what’s needed while these com-panies still have time.

SEARS GOES HOLLYWOOD—IN A SUPER BIG WAY!

Check Out The “Man of Steel” on Page 8.

Sears Hoffman Estates Headquarters on June 5, 2013

CEOs continued from page 7

company and its stock, there’s a good chance the consensus is underestimating the potential for positive surprises.

It has been said that Chair-man Lampert takes a realistic, unsentimental view of the compa-ny. While criticized by the retail experts for refusing to invest in store revamps and sprucing up as a matter of routine, he rec-ognizes that, with many subpar locations and stiff competition, Sears might not get much payoff from such spending.

Consider what happened with J.C. Penny’s risky bid to redesign its stores in a long-shot effort to win younger, hipper customers.

We have heard from the analysts; now we would like to know your opinion on Sears Holdings future turnaround. You can submit your comments by e-mail to: [email protected] or mail them in the enclosed envelope.

We plan on publishing a rep-resentative sampling of your comments in the next issue of Straight Talk. You must include your full name in any correspon-dence to us. If we publish your comments, we will only identify you by city and state, i.e., “retiree from Chicago, IL.”

READ PAGE 11 FIRST!DO YOU AGREE WITH

THE ANALYSTS ABOUT SEARS?

Analysts continued from page 11

sears 2013 annual meeting is sears in rocky territory ... · increased more than 8 percent last...

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