ILL-inois: Sears suffers 20th consecutive losing quarter

Four years ago then-Illinois governor Pat Quinn, a Chicago Democrat, rammed through a lame-duck session income tax hike that he claimed at the time was temporary. The CME Group and Sears asked for tax breaks--or else they'd leave Illinois--and Quinn hand his fellow Democrats complied.

Let's see how Sears is doing.

From the Wall Street Journal--paid subscription required:

What happens to Sears Holdings' business matters more for most investors than what happens to its stock.

Sears on Monday reported that it lost $303 million in its fiscal first quarter that ended May 2, marking its 20th consecutive quarter in the red. Same-store sales fell 10.9%, year over year, far worse than the 1.8% decline called for by the consensus of analysts tracked by FactSet. But that consensus now consists of just one analyst, Evercore ISI’s Greg Melich, with Credit Suisse’s Gary Balter having stopped covering the stock earlier this year.

That scant coverage reflects a scantily held stock for a company that is worth far less than it once was. Chief Executive Eddie Lampert and the hedge fund he controls own 49% of Sears shares. Bruce Berkowitz's Fairholme Capital Management, Sears board member Thomas Tisch and passive investment managers Vanguard Group, BlackRock and State Street own an additional 33%.

The investors that remain hold just 18% of a company that now has a market capitalization of just $4.6 billion. That is less than one-fifth of the $25.9 billion Sears was worth at the end of 2006, before it started hiving off assets amid deteriorating sales.

Quinn should have let both firms leave. Or, better yet, he should not have raised taxes in the first place. Crony capitalism is an overlooked cause of Illinois' financial crisis.