Sears Holdings Corp (NASDAQ:SHLD) announced on October 16 that its second-largest investor Bruce R. Berkowitz has decided to leave his position on the company’s board as of October 31. Berkowitz is one of the Sears’ largest shareholders, controlling 25% of the firm’s shares, according to Bloomberg. However, the company didn’t give any explanation about his exit.
“On behalf of the board of directors and management, I want to thank Bruce for his long-term commitment and investment in Sears Holdings,” said Sears Holdings chairman and CEO, Edward S. Lampert in a statement. “His leadership, guidance and counsel as a board member have been invaluable to our company.”
Shares of Sears Holdings Corp (NASDAQ:SHLD) fell by 11.5% after the departure of the investor was announced publicly, as reported by The New York Times. The company has suffered an $11 billion loss in the past six years, forcing them to sell assets. Moreover, the ailing home appliance retailer is also planning to close hundreds of stores this year, following a decline in sales over the past few years. The company just borrowed $100 million from ESL Investments, an affiliate of CEO Lampert’s hedge fund.
Sears Holdings Corp (NASDAQ:SHLD) has been losing directors left and right in recent months. The most notable resignation was in December when Steven Mnuchin stepped down in anticipation of his appointment as Treasury Secretary in the Trump administration. Besides Mnuchin, Alesia Haas also resigned in December, followed by Cesar Alvarez in March. The board seat left by Mnuchin has not been filled yet. Sears is also not planning to fill the position vacated by Berkowitz.
Bruce Berkowitz served as a member of the board beginning in February 2016. The 59-year-old, who’s the chief investment manager of Fairholme Capital Management, has supported the retailer during its hardest times, amid plunging sales and declining stores.
Separately, Sears confirmed that the exit of Berkowitz was not triggered by his disagreement with the company’s policies, operations, and practices. Berkowitz and Lampert have a longstanding relationship and have great respect for each other, despite the former’s departure.
Before resigning, Berkowitz said that there was still value in the traditional retail business. When asked whether Amazon.com, Inc. (NASDAQ:AMZN) would acquire Sears, he only said that the move would be wise, even though he had no reason to be optimistic it would happen.