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This 19 00:01:08,240 --> 00:01:11,760 Speaker 1: is taking stock with Pim Box and Kathleen Hays on 20 00:01:11,880 --> 00:01:17,320 Speaker 1: Bloomberg Radio. Sears Holdings. What is left of Sears Holdings 21 00:01:17,520 --> 00:01:22,920 Speaker 1: after the CFO departs and Eddie Lampert, who controls Sears Holdings, 22 00:01:23,280 --> 00:01:26,000 Speaker 1: decides to perhaps put the brands of Ken Moore, die 23 00:01:26,040 --> 00:01:29,839 Speaker 1: Hard and Craftsman on the auction block. Let's find out 24 00:01:29,840 --> 00:01:34,240 Speaker 1: more From Lauren Coleman Lochner, retail reporter for Bloomberg News. Lauren, 25 00:01:34,280 --> 00:01:36,160 Speaker 1: thanks very much for coming in. Much appreciate it. All right, 26 00:01:36,200 --> 00:01:38,840 Speaker 1: so give us the news. Tell us what's going on. Sure, So, 27 00:01:38,959 --> 00:01:42,080 Speaker 1: Sears for the last few years has been selling or 28 00:01:42,120 --> 00:01:45,600 Speaker 1: spinning off assets. Um as it's been burning through quite 29 00:01:45,600 --> 00:01:48,720 Speaker 1: a bit of cash. It's was more than two billion 30 00:01:49,040 --> 00:01:52,640 Speaker 1: in cash burn last year. So they're just not funding 31 00:01:53,200 --> 00:01:57,120 Speaker 1: the operations. Um they need to go to outside sources 32 00:01:57,120 --> 00:02:03,120 Speaker 1: of money. The stores sales declining sales, UH, same store sales, 33 00:02:03,200 --> 00:02:05,920 Speaker 1: which is a measure that we look at since it met, 34 00:02:05,960 --> 00:02:10,560 Speaker 1: you know, it's like it's apples to apples. They've been declining. 35 00:02:10,600 --> 00:02:13,880 Speaker 1: I think it's been every quarter but one since the 36 00:02:13,919 --> 00:02:17,320 Speaker 1: company's merged. So operationally, they've had a lot of problems 37 00:02:17,400 --> 00:02:20,560 Speaker 1: and they've tried a lot of things, but nothing that 38 00:02:20,600 --> 00:02:23,720 Speaker 1: they've tried is really managed to turn the business around. 39 00:02:23,960 --> 00:02:26,240 Speaker 1: So what is the problem here? I love the way 40 00:02:26,320 --> 00:02:30,800 Speaker 1: you start your story today. You say, you know Sears 41 00:02:30,880 --> 00:02:34,640 Speaker 1: chief executive officer Eddie Lampert is in a bad spot 42 00:02:34,720 --> 00:02:38,639 Speaker 1: when he's considering selling off three of the retailer's crown jewels, 43 00:02:38,720 --> 00:02:40,920 Speaker 1: Ken More Craftsman, and I heard, look, he's like cutting 44 00:02:40,919 --> 00:02:42,880 Speaker 1: off the arms, arms and legs pretty soon. You know, 45 00:02:42,919 --> 00:02:45,120 Speaker 1: what do you have left to stand on? Right? Because 46 00:02:45,160 --> 00:02:49,160 Speaker 1: you have the licensing stream of revenue from those brands. Now, um, 47 00:02:49,600 --> 00:02:53,000 Speaker 1: they did look a couple of years ago at exploring 48 00:02:53,160 --> 00:02:57,359 Speaker 1: outside companies licensing the brands as well, but then you're 49 00:02:57,400 --> 00:02:59,480 Speaker 1: giving people less of a reason to come into your 50 00:02:59,480 --> 00:03:04,560 Speaker 1: own store. Worse, Sears is still the major appliance seller 51 00:03:04,760 --> 00:03:07,960 Speaker 1: and Ken Moore is a big draw for customers. If 52 00:03:08,000 --> 00:03:10,679 Speaker 1: you don't have that, it's you know, you could sell 53 00:03:10,720 --> 00:03:12,519 Speaker 1: it in license at bat too. But if you don't 54 00:03:12,560 --> 00:03:14,440 Speaker 1: have that, what do you have to bring people in there? 55 00:03:14,480 --> 00:03:17,640 Speaker 1: Not coming in for clothing. That's not an area that 56 00:03:17,680 --> 00:03:22,640 Speaker 1: they've been able to fix. They've been struggling on most fronts, 57 00:03:22,919 --> 00:03:26,240 Speaker 1: most categories ever since the company has merged, and even 58 00:03:26,280 --> 00:03:30,960 Speaker 1: before Sears and Kmart were merged, Lauren I was looking 59 00:03:31,000 --> 00:03:33,520 Speaker 1: at the details of things like ken More products and 60 00:03:33,560 --> 00:03:37,800 Speaker 1: so on. They're made by Whirlpool, ge Panissan. They don't 61 00:03:37,800 --> 00:03:40,720 Speaker 1: make any of this, They just put their brand on it. 62 00:03:40,760 --> 00:03:46,000 Speaker 1: Now they may have some unique features tea so UM, 63 00:03:46,480 --> 00:03:50,080 Speaker 1: it's all contained in this special purpose vehicle, this k 64 00:03:50,320 --> 00:03:54,720 Speaker 1: C D I P Intellectual Property LLC. Who do you 65 00:03:54,720 --> 00:03:56,720 Speaker 1: think's gonna buy it? I mean, who would be interested? 66 00:03:56,800 --> 00:04:00,400 Speaker 1: Husky Apex Tool Group makes some of the tools, so right, 67 00:04:00,480 --> 00:04:03,200 Speaker 1: you might. You know. What's been suggested to me is 68 00:04:03,240 --> 00:04:06,960 Speaker 1: that you might have manufacturers UM looking at some of 69 00:04:07,000 --> 00:04:11,360 Speaker 1: these brands. UM. In terms of the tools, at least 70 00:04:11,720 --> 00:04:16,440 Speaker 1: batteries is tough. It's really almost a commod commodity these days. 71 00:04:16,760 --> 00:04:21,280 Speaker 1: UM as far as the appliances go. One thought has 72 00:04:21,320 --> 00:04:23,799 Speaker 1: been that you could have a retailer like home Depot, 73 00:04:24,440 --> 00:04:27,520 Speaker 1: which now has its own brands, but this would be 74 00:04:27,560 --> 00:04:31,240 Speaker 1: a draw and it's a successful retailer, and that this 75 00:04:31,279 --> 00:04:35,680 Speaker 1: could really revitalize the brands. Now, we don't know whether 76 00:04:35,680 --> 00:04:37,640 Speaker 1: they're going to sell these, and Sears has put a 77 00:04:37,720 --> 00:04:40,320 Speaker 1: lot of stuff on the block where you know it 78 00:04:40,360 --> 00:04:43,920 Speaker 1: hasn't completed the transaction, or it's you know, done something 79 00:04:43,960 --> 00:04:49,240 Speaker 1: different like spinning off the entity instead. So it's possible 80 00:04:49,360 --> 00:04:53,000 Speaker 1: that nothing will happen as well. But Eddie Lamport will 81 00:04:53,040 --> 00:04:55,800 Speaker 1: stay in his seat running the company and just keep 82 00:04:55,839 --> 00:04:59,159 Speaker 1: selling things off until there's nothing left to sell. Is that? Oh? 83 00:04:59,240 --> 00:05:04,800 Speaker 1: They you know, they're they're really emptying the shelves here. Um, 84 00:05:04,880 --> 00:05:06,680 Speaker 1: there isn't a lot left. There are a lot of 85 00:05:06,720 --> 00:05:10,159 Speaker 1: stores still left. They only put about two fifty into 86 00:05:10,160 --> 00:05:12,520 Speaker 1: the into the red that they spun off last year, 87 00:05:12,560 --> 00:05:16,160 Speaker 1: but those were two fifty of their best stores. They 88 00:05:16,160 --> 00:05:20,920 Speaker 1: have some other stores pledged um already, so the value 89 00:05:20,920 --> 00:05:25,400 Speaker 1: of the remaining real estate is probably not as strong 90 00:05:25,680 --> 00:05:33,240 Speaker 1: as what's already been spun or pledged elsewhere. Well, um, 91 00:05:33,320 --> 00:05:36,400 Speaker 1: we'll see what happens next. I'm sure you'll be back soon. 92 00:05:36,440 --> 00:05:38,040 Speaker 1: Though it seems like this is the story. Is that 93 00:05:38,200 --> 00:05:42,360 Speaker 1: the plot is thickening, So it seems Lauren Colemanlauter, thank 94 00:05:42,360 --> 00:05:44,440 Speaker 1: you so very much for joining US retail reporter for 95 00:05:44,480 --> 00:05:49,240 Speaker 1: Bloomberg News, reporting on Stears plans to considering options for 96 00:05:49,360 --> 00:05:51,719 Speaker 1: Ken Moore, Craftsman, and die Hard, some of its most 97 00:05:51,920 --> 00:05:56,719 Speaker 1: iconic brands, to politics. We go taking a look at 98 00:05:56,800 --> 00:05:59,680 Speaker 1: some of the comments that the President Obama made at 99 00:05:59,720 --> 00:06:03,880 Speaker 1: the G seven meeting in Japan about Hillary Clinton's emails, 100 00:06:03,920 --> 00:06:08,400 Speaker 1: also about Donald Trump. Craig Gordon joins us now managing 101 00:06:08,560 --> 00:06:13,640 Speaker 1: editor for Bloomberg Editorial in Washington. Craig, Welcome to the show. Hey, 102 00:06:13,640 --> 00:06:17,800 Speaker 1: thanks for having me so, uh, you know, it's interesting. 103 00:06:18,000 --> 00:06:19,800 Speaker 1: I think people were waiting to hear the president asked 104 00:06:19,800 --> 00:06:23,760 Speaker 1: at that press conference today some questions about G seven 105 00:06:23,800 --> 00:06:27,440 Speaker 1: ministers and economies, but a lot of political questions. What 106 00:06:27,520 --> 00:06:30,680 Speaker 1: did you make about his comments on Hillary Clinton's emails. 107 00:06:31,320 --> 00:06:33,480 Speaker 1: I mean, look, this has been an uncomfortable topic for 108 00:06:33,520 --> 00:06:37,480 Speaker 1: the Obama administration. I think they know what that report 109 00:06:37,480 --> 00:06:40,040 Speaker 1: says that she obviously did not really follow the rules 110 00:06:40,160 --> 00:06:42,640 Speaker 1: and actually took some steps that we now know from 111 00:06:42,640 --> 00:06:44,760 Speaker 1: this report where she cut some corners for the sake 112 00:06:44,800 --> 00:06:46,600 Speaker 1: of privacy, for the sake of her emails not being 113 00:06:46,720 --> 00:06:49,279 Speaker 1: archived for all eternity and different things. This is not 114 00:06:49,400 --> 00:06:51,480 Speaker 1: something that President Barack Obama really wants to stand up 115 00:06:51,480 --> 00:06:53,680 Speaker 1: there and have to defend and have to, you know, 116 00:06:53,760 --> 00:06:56,440 Speaker 1: sort of answer for, because it really he has said 117 00:06:56,480 --> 00:06:58,640 Speaker 1: in prior things that he did not he would not 118 00:06:58,640 --> 00:07:00,120 Speaker 1: have done it this way he had wished, you know, 119 00:07:00,200 --> 00:07:02,080 Speaker 1: says she could have done it differently. So it puts 120 00:07:02,080 --> 00:07:04,799 Speaker 1: Obama in a very tough spot. Obviously, he's a loyal Democrat. 121 00:07:04,839 --> 00:07:07,280 Speaker 1: He would like Hillary Clinton succeed him versus Donald Trump. 122 00:07:07,480 --> 00:07:09,240 Speaker 1: So he has to walk a very fine line. But 123 00:07:09,480 --> 00:07:11,640 Speaker 1: I don't think the White House is enjoying having to 124 00:07:11,960 --> 00:07:15,560 Speaker 1: defend email practices by Hillary Clinton that they actually don't 125 00:07:15,560 --> 00:07:18,960 Speaker 1: agree with themselves. Craig, can you comment on Bernie Sanders 126 00:07:18,960 --> 00:07:22,040 Speaker 1: and what he's trying to do with the convention committee 127 00:07:22,240 --> 00:07:25,960 Speaker 1: and the various platforms that the Democratic Party will have 128 00:07:26,040 --> 00:07:29,280 Speaker 1: to adopt. Yeah. Sure, I mean, look at every national 129 00:07:29,280 --> 00:07:31,880 Speaker 1: political convention, each party adopts a party platform that is 130 00:07:31,920 --> 00:07:34,880 Speaker 1: supposed to be sort of the guiding principles, the bedrock 131 00:07:34,920 --> 00:07:38,560 Speaker 1: principles of that political party. Um, Bernie Sanders, you know, 132 00:07:38,680 --> 00:07:41,240 Speaker 1: I think even Bernie Sanders is that he's a little surprised. 133 00:07:41,560 --> 00:07:43,720 Speaker 1: And when he started running for president, he really was 134 00:07:43,800 --> 00:07:45,800 Speaker 1: just trying to influence the conversation. He was trying to 135 00:07:45,840 --> 00:07:48,360 Speaker 1: pull the party towards the left, toward the liberal side 136 00:07:48,360 --> 00:07:50,760 Speaker 1: of the spectrum. Um in the eventual nominee, of course, 137 00:07:50,760 --> 00:07:53,400 Speaker 1: he ended up coming much closer to winning than even 138 00:07:53,480 --> 00:07:55,520 Speaker 1: he might have expected. But at the end of the day, 139 00:07:55,520 --> 00:07:59,280 Speaker 1: this always was about getting more progressive policies into the 140 00:07:59,280 --> 00:08:02,400 Speaker 1: party conversation and eventually into the party platform. Things like 141 00:08:02,640 --> 00:08:05,160 Speaker 1: a fifteen dollar minimum wage nationally, things like you know, 142 00:08:05,200 --> 00:08:08,280 Speaker 1: fully paid college, things like fully paid healthcare. And so 143 00:08:08,400 --> 00:08:10,440 Speaker 1: right now, look, you know, Hilly Clinton is within a 144 00:08:10,480 --> 00:08:12,920 Speaker 1: hundred delegates of being the nominee. The Democratic Party officially 145 00:08:12,920 --> 00:08:16,640 Speaker 1: shall clear that bar easily in California and June seventh, um, 146 00:08:16,720 --> 00:08:18,800 Speaker 1: So Bernie Sanders at this point, you know, he can 147 00:08:18,840 --> 00:08:20,360 Speaker 1: say he's still in the race a little bitter end, 148 00:08:20,360 --> 00:08:25,560 Speaker 1: but he But can he influence the platform perhaps in 149 00:08:25,640 --> 00:08:29,920 Speaker 1: foreign policy? Uh, that's a little trickier. I think he 150 00:08:30,120 --> 00:08:33,240 Speaker 1: I think he is mostly interested in the domestic policies. 151 00:08:33,240 --> 00:08:36,360 Speaker 1: I think he's mostly interested in trying to get the 152 00:08:36,400 --> 00:08:39,120 Speaker 1: Democratic Party to be the Democratic Party, perhaps the FDR, 153 00:08:39,240 --> 00:08:41,960 Speaker 1: you know, sort of that that old that thing where 154 00:08:41,800 --> 00:08:46,120 Speaker 1: the government is truly providing for people a living wage, healthcare, education, 155 00:08:46,160 --> 00:08:48,520 Speaker 1: all of those things. He has talked less about foreign 156 00:08:48,520 --> 00:08:51,120 Speaker 1: policy doing the campaign, just by nature of it. But 157 00:08:51,240 --> 00:08:53,760 Speaker 1: he so his money focuses on domestic and I think 158 00:08:53,800 --> 00:08:56,000 Speaker 1: you will see a Democratic Party platform that sounds a 159 00:08:56,000 --> 00:08:58,880 Speaker 1: lot like Bernie Sanders party platform because frankly, it doesn't 160 00:08:58,920 --> 00:09:01,120 Speaker 1: really cost Hilly Clint anything to have it in the platform, 161 00:09:01,200 --> 00:09:03,720 Speaker 1: and nobody, we blunt, nobody really reads the platform. After 162 00:09:03,760 --> 00:09:07,000 Speaker 1: the conventions over, Bernie can declare, when Clinton can declare, 163 00:09:07,040 --> 00:09:09,360 Speaker 1: she kept Bernie happy and hopefully Bernie supporters come onto 164 00:09:09,360 --> 00:09:11,439 Speaker 1: her side. That would be the ultimate endgame failure Clinton. 165 00:09:11,600 --> 00:09:15,280 Speaker 1: Some interesting comments from President Obama when it comes to 166 00:09:15,400 --> 00:09:17,720 Speaker 1: Donald Trump, and of course Trump saying today he'd be 167 00:09:17,760 --> 00:09:24,839 Speaker 1: delighted to debate Bernie Sanders. Uh. Donald President Obama saying 168 00:09:24,840 --> 00:09:27,960 Speaker 1: that world leaders are rattled by the prospect of a 169 00:09:28,000 --> 00:09:32,520 Speaker 1: Trump presidency, and Donald Trump shoots back that it's good 170 00:09:32,559 --> 00:09:36,160 Speaker 1: to be uh rattled in a friendly way. Were you 171 00:09:36,200 --> 00:09:38,400 Speaker 1: surprised to hear the president speaking this way of Trump, 172 00:09:38,400 --> 00:09:40,439 Speaker 1: although you know he is sitting down with leaders from 173 00:09:40,440 --> 00:09:42,920 Speaker 1: all over the world. Yeah. And it's interesting because a 174 00:09:42,960 --> 00:09:45,280 Speaker 1: lot of our Bloomberg reporters and editors, we we sort 175 00:09:45,280 --> 00:09:47,520 Speaker 1: of get these reports back in Washington that they'll go 176 00:09:47,600 --> 00:09:49,800 Speaker 1: interview off in the CEO or the kind of folks 177 00:09:49,800 --> 00:09:52,480 Speaker 1: that Bloomberg obviously would interview and they all are a 178 00:09:52,520 --> 00:09:54,920 Speaker 1: bit of gas that was happening in America. They're sort 179 00:09:54,960 --> 00:09:57,120 Speaker 1: of puzzled and looked to our reporters to try to 180 00:09:57,120 --> 00:09:59,000 Speaker 1: explain it, and and even some of us in Washington 181 00:09:59,040 --> 00:10:01,240 Speaker 1: are still trying to explain to ourselves. So I'm not 182 00:10:01,280 --> 00:10:03,600 Speaker 1: surprised that that sentiment is out there, and nor am 183 00:10:03,600 --> 00:10:06,000 Speaker 1: I surprised that Barack Obama's talking about it. Um. I 184 00:10:06,040 --> 00:10:08,880 Speaker 1: actually think that he is. Um. He is sort of 185 00:10:08,880 --> 00:10:11,679 Speaker 1: frustrated that what he thinks has been some bridges bridge 186 00:10:11,679 --> 00:10:13,640 Speaker 1: building that he's done in his eight years in office. 187 00:10:13,920 --> 00:10:15,720 Speaker 1: You know that it seems like Donald Trump is plating 188 00:10:15,760 --> 00:10:17,520 Speaker 1: stick of dynamite under those bridges, and I think he's 189 00:10:17,559 --> 00:10:19,880 Speaker 1: frustrated about that, And I think as he gets closer 190 00:10:19,880 --> 00:10:22,120 Speaker 1: to the end of his term, he will feel, you know, 191 00:10:22,160 --> 00:10:25,120 Speaker 1: freer and freer almost at every passing day to say 192 00:10:25,160 --> 00:10:27,320 Speaker 1: that about Donald Trump. He's made comments like this before. 193 00:10:27,400 --> 00:10:30,480 Speaker 1: This is obviously a very high profile international setting, so 194 00:10:30,480 --> 00:10:32,319 Speaker 1: it's a little bit unusual maybe to hear the president 195 00:10:32,360 --> 00:10:34,760 Speaker 1: talk about domestic politics and a foreign trip. But no, 196 00:10:34,960 --> 00:10:36,760 Speaker 1: I think he's made it very clear that he is 197 00:10:36,840 --> 00:10:39,520 Speaker 1: troubled by Trump. He is worried that he will diminish 198 00:10:39,600 --> 00:10:42,120 Speaker 1: US influence in the world and actually damage, you know, 199 00:10:42,160 --> 00:10:44,920 Speaker 1: damage our prospects abroad. That that's Barack Obama's opinion. He's 200 00:10:45,080 --> 00:10:47,360 Speaker 1: he's certainly entitled to it, and he feels more free 201 00:10:47,360 --> 00:10:49,839 Speaker 1: every day to share it with us. Craig Gordon, thank 202 00:10:49,880 --> 00:10:51,960 Speaker 1: you very much for sharing all this information with us. 203 00:10:51,960 --> 00:10:57,160 Speaker 1: Managing editor, Bloomberg News, Washington d C. Bureau. You're listening 204 00:10:57,160 --> 00:11:00,679 Speaker 1: to Taking Stock on pim Fox, my co host Kathleen Hayes, 205 00:11:00,920 --> 00:11:04,640 Speaker 1: Craig Gordon speaking about Trump crossing the delicate threshold and 206 00:11:04,840 --> 00:11:09,000 Speaker 1: Clinton emails and the fallout from that Inspector General report. 207 00:11:09,160 --> 00:11:10,560 Speaker 1: This is Bloomberg Radio.