The Chase for Castagna: Ex-Penney's Executive Said to Be in Kmart Talks

Financier-turned-retailer Eddie Lampert is trying to lure Vanessa Castagna into his realm.

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Vanessa Castagna

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New York — Financier-turned-retailer Eddie Lampert is trying to lure Vanessa Castagna into his realm.

Rumblings in the marketplace about Castagna heading to a major retailer reached a boiling point Wednesday as Lampert, the hedge fund investor who took Kmart out of bankruptcy and into a planned acquisition of Sears, Roebuck & Co., was said to be interested in her. Also in hot pursuit is Office Depot, which is scouting out a chief executive officer.

Reached by phone, Castagna, 55, said, “I haven’t accepted any offer, and I’m not going to make a decision for a while.”

Castagna is expected to make a decision after the holidays. Kmart Holdings Corp. did not return calls for comment.

Castagna, the former chairman and ceo of J.C. Penney’s stores, catalogue and Internet operation, left the retailer last month. Although considered the front-runner to succeed Allen Questrom, who retired on Dec. 1, as chairman and ceo of J.C. Penney Co., that post instead went to former LVMH Moët Hennessy Louis Vuitton executive Myron Ullman 3rd.

Because there was no noncompete restriction in her employment agreement with Penney’s, Castagna is free to work with any retailer.

Castagna’s name was linked to Sears as a possible addition to the retailer’s executive team almost immediately after the appointment of Ullman to the top Penney’s spot. It came up again when Kmart announced its planned purchase of Sears, a week after Castagna left Penney’s. With a background at Penney’s, Wal-Mart and Target, Castagna seems a natural fit for a role at the Kmart-Sears merged company.

“I could see Vanessa in the new holding company. Eddie Lampert is a strong chairman, but the key, and what this new company needs, is a very strong merchant,” said investment banker Peter Solomon of Peter J. Solomon Co.

According to several sources, Sears and Office Depot have been closely eyeing Castagna.

Elaine Hughes, who heads the executive search firm that bears her name, observed, “I think very well of Vanessa Castagna. She has certainly a proven track record from one environment to another, particularly the last one at Penney developing the strategy for the successful turnaround of a company at the midtier level. Going from a mass chain like Wal-Mart to a midtier retailer like Penney, and focusing on strategizing a turnaround and brand positioning, is similar to what one would have to do at Sears. Sears needs a review of its existing strategy, as well as [direction] on how to position it as a meaningful retailer.”

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