The Devil To Pay

When hedge-fund golden boy Eddie Lampert married Sears to Kmart, in 2005, many were skeptical. Now, with hundreds of stores closed and thousands thrown out of work, Lampert defends his strategies to WILLIAM D. COHAN, who also tracks down the ringleader of the 2003 kidnapping that could have ended Lampert’s life

- William D. Cohan

Few people on Wall Street are as polarizing as Eddie Lampert, the billionaire majority shareholder of Sears and Kmart. His friends say he is reticent, while his critics find him aloof. His pals talk about his very high standards, while some observers say he is condescending, overly critical, and disengaged. Some people praise his determination and persistence, while others see only inexplicable stubbornness in sticking to failed ideas. “His critics will say he’s not really a team guy. He is a team guy,” insists Lampert’s close friend David “Tiger” Williams, a well-known Wall Street trader. “The Eddie I know works incessantly because he’s a ‘figure-it-out guy.’”

Williams believes that Lampert is a target for criticism because he is “a very shy person” and avoids the public eye. But Mark Cohen, who was C.E.O. of Sears Canada from 2001 to 2004, and now is a professor at Columbia Business School, says that Lampert is “the wizard behind the curtain, managing the business from Florida or Connecticut or aboard his yacht” via teleconference and taking from the company all he can. While admitting he runs the company primarily from Florida, Lampert counters that he has put a fortune of his own money into the business. Cohen responds that Lampert’s money is collateralized against hard assets, of which Lampert will take control if the company defaults on the loans. (A spokesperson for Lampert says that can happen only if Lampert is the highest bidder, and the purchase is approved by the bankruptcy court, “generally speaking.”)