“You make Sears sound like a liquidation play, not a retail recovery.”-from Fortune magazine

“The retail recovery is a potential upside. Regardless, you’ll see gigantic cash flows from the closing of locations, the pulling-out of the cash from inventory, work in process, and distribution centers. They’re not idiots when it comes to real estate. They understand that today’s standalone store can be tomorrow’s multi-use hotel/residential-retail center. I think Eddie Lampert [chairman of Sears Holdings] will end up being one of a few unbelievable case studies on what it means to be a long-term investor.”-answer from Bruce Berkowitz, a major stockholder in Sears Holdings

Fortune published a recent interview with Bruce Berkowitz, in which he basically said Sears and Kmart could make more profits for investors by being closed down and selling off their inventories and real estate.  I warned of this last year.

An InvestorPlace contributor, Will Ashworth, explained how the Romneyesque scheme is actually working.

For real estate, Ashworth says Berkowitz values the land property owned or leased by Sears Holdings to be about $17 billion USD.  Then there’s inventory.  Berkowitz estimates that a net profit of $2.5 billion could be made by selling off inventory. Ashworth himself is more conservative, thinking it be about a $1 billion net gain for investors.

Of course you can only sell off land and inventory by closing down the stores: “Many see Lampert using Sears as the next Berkshire Hathaway (NYSE:BRK.B), taking the proceeds of assets sales and reinvesting them elsewhere until Sears, the retailer, ceases to exist. It might take awhile, but Berkowitz is willing to patiently wait because deep down he knows Sears is worth far more dead than alive.“-Will Ashworth, InvestorPlace