Major Sears Shareholder Berkowitz Leaving Board of Directors

Bruce R. Berkowitz, one of Sears Holdings’ biggest investors and a board member, is leaving the company.

Sears confirmed that Berkowitz has chosen to leave the board and will make his exit Oct. 31.  He has served on the board of directors since February 2016, according to the company.

Sears’ sales have steadily declined in recent years. Closing stores and selling product brands have been part of the company’s efforts to cut costs and return to profitability.

Berkowitz is the “second-largest Sears investor,” with ownership in about 25 percent of the company’s shares, Bloomberg reports.  In addition to leaving the board of directors, Berkowitz is “shutting his hedge fund and distributing its holdings to investors, including a stake in Sears Holdings Corp.,” Bloomberg says.

As a result, Sears’ shares “have tumbled after the ailing retailer announced that an executive of the company’s second largest shareholder was resigning from is board,” The New York Times reports.

Sears did not offer an explanation for Berkowitz’s departure.

“On behalf of the board of directors and management, I want to thank Bruce for his longterm commitment and investment in Sears Holdings,” Sears Holdings chairman and CEO, Edward S. Lampert, says in a statement. “His leadership, guidance and counsel as a board member have been invaluable to our company.”

This month, Lampert offered the company a $100 million loan, growing his loans to the company to about $1.7 billion. In addition, Sears Canada has chosen to shut down and liquidate its assets.