Sears Holdings has lost two more C-suite executives and a key director in the last week, adding more uncertainty to the struggling retailer during the key holiday quarter.
Jeffrey Balagna, a former Sears’ executive vice president, who in the course of his three years at the company had overseen areas like the retailer’s tech backbone as CIO and large home services offering, left the company last week.
And Sears President and Chief Member Officer Joelle Maher has also just left the company after only 17 months on the job, the company has confirmed. In that role, she oversaw the strategy for the Shop Your Way loyalty program, on which Sears has bet its future viability after years of large sales declines, at the company’s namesake stores. Sears Holdings also runs Kmart. (Earlier this year, Sears’ finance chief left but has since been replaced.)
These departures came as Steve Mnuchin, the former Goldman Sachs (GS) executive tapped by President-elect Donald Trump to be the country’s next Treasury secretary, stepped down from the board of Sears last week. Mnuchin, who was a Yale roommate of Sears Holdings’ CEO Eddie Lampert, joined the board in 2005 after Sears merged with Kmart, where he had been a board member.
During that time, the retailer has not reported any year of comparable sales increases despite a number of turnaround efforts. The Sears and Kmart chains have closed hundreds of stores each in recent years. Mnuchin’s departure reduced the size of the board to nine directors. None of the remaining directors, other than Lampert, have ever been c-level executives at a retailer.
Though it is not unusual for a major retailer to have a certain amount of executive churn – Target (TGT) has had a number of top executives leave in the last few months, raising concerns about its efforts heading into the fourth quarter – or for that to portend bad holiday season results, the departures could signal Sears is having difficult retaining talent at a time its turnaround plan is failing to gain traction.
Lampert has repeatedly insisted in the last few years that Sears was reinventing itself as a membership-focused retailer that will need less physical space. But those efforts have been to little avail so far: In its most recent quarter, Sears Holdings (which also owns the Kmart discount chain) reported comparable sales fell 5.2%. In the first half of the current fiscal year, Sears has lost $866 million, adding to the $8 billion it lost between 2010 and 2015. Sears has sold off many top assets to generate cash and stay liquid.
One of the linchpins of Sears’ efforts has been its Shop Your Way program, widely seen as a state-of-the-art loyalty program. A growing percentage of Sears and Kmart’s sales have gone through the SYW platform, a bright spot for Sears, making Maher’s departure all the more notable.
Sears is scheduled to report third-quarter results on Thursday morning.