Sears Trimming Its Store List Even Further
U.S. retailer Sears Holdings Corp. (NASDAQ:SHLD) is embarking on another round of store closures. The company announced it would close another 28 Kmart stores later this year. This is in addition to the 150 Sears and Kmart stores it already announced it was closing by the end of its third quarter.
All of the stores except one in Florida will close in mid-November. Eligible employees affected by the store closures will receive severance and will have the option to apply for open positions at other Kmart or Sears locations. The store’s liquidation sales could be coming as early as the end of this month
The news of new closures came as Sears reported its second-quarter earnings, revealing another quarterly loss. Its net loss narrowed to $251 million, or $2.34 per share in the second quarter ended July 29, from $395 million or $3.70 per share, a year earlier. Adjusted for one-time gains and costs, the loss came to $1.16 per share. Total revenue fell 22 percent to $4.37 billion from $5.66 billion.
The company said sales at stores open for at least a year fell 11.5 percent in the second quarter. Comparable sales fell 13.2 percent at Sears and 9.4 percent at Kmart. Sears Holdings has yet to report a same-store sales increase since Kmart and Sears were merged in 2005.
Sears’ declines are far deeper than those of rivals Macy’s and J.C. Penney. The company has struggled with years of losses and declining sales. Sears CEO Eddie Lampert blamed “continued softness in store traffic and elevated price competition” for the weak results.
Store closures shaved off $770 million of revenue in the latest quarter. The company has already closed dozens of Sears department stores and Kmart discount stores this year. Sears said it earned $460 million in cash from real estate deals in the second quarter.
Sears was once the largest U.S. retailer. In March, Sears said there is “substantial doubt” it could continue as a viable concern and teased a possible bankruptcy. In February, the company said it would cut at least $1 billion in costs this year
Lampert said at Sears’ annual shareholder meeting that the company was “fighting like hell” to turn itself around. Sears has already sold off many core assets like its Lands’ End clothing brand and its Craftsman brand. Recently it said it would start selling its Kenmore appliances on Amazon.com to extend that brand’s reach. Lampert claims the company is “making progress” on its turnaround, but its persistently awful results say otherwise.
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