Sears to close 100 more stores – Consumer News

on May31

31 May 2018 | 9:10 am

(Bloomberg)—Sears Holdings kicked off another fiscal year with declining sales from a dwindling number of stores, and more closings are on the way.

Sears said this morning that it plans to close about 100 “non-profitable” stores.

The company, which originally announced it would identify 72 stores, cut the number a few hours later to 63—15 Kmarts and 48 Sears. The other nine stores were pulled from the closing list for further evaluation, according to a statement. The list of affected stores includes a Kmart in Rockford and Sears stores in Vernon Hills, Aurora, Gurnee and Springfield. As of May 5, the retailer had 529 Sears stores and 365 Kmart stores.

“(O)ur stores are—and will remain—a critical component in our transformation,” Chief Financial Officer Rob Riecker said in a pre-recorded call, according to a transcript. “But to best meet our members’ evolving needs and to drive profitability, we will need to continue to right-size our store base and focus on our best stores, including our new smaller store formats.”

Sears posted a first-quarter loss of $3.93 a diluted share. Revenue fell due to fewer stores and a 12 percent drop in comparable-store sales.

The decline in comparable-store sales, a key metric in retail, should be “alarming” to investors, said Noel Hebert, a Bloomberg Intelligence analyst.

“You’ve basically closed half the store base over the last few years and your ‘best’ stores are still negative 12 percent,” he said.

Sears stock closed today at $2.81, down 12.46 percent.

CEO Edward Lampert has been striving to revive the company by closing unprofitable stores and selling or spinning off assets like its Lands’ End clothing unit. But Sears has lost about $11 billion since 2012. Now it’s hired a second set of advisers to re-shop its Kenmore appliance brand along with some home-services businesses. In April, Lampert’s hedge fund, ESL Investments, said it was willing to purchase those assets itself.

The retailer said it plans to take further action “with respect to certain near-term maturities of our debt, including through repayments, refinancings and extensions.” First-quarter sales were $2.9 billion, compared with $4.2 billion a year earlier, Sears said.

A rally in Sears bonds triggered by the company’s search for asset buyers is casting doubt on plans for reducing the retailer’s debt, Lampert said earlier this week. He’s the retailer’s biggest shareholder and has been using his own money for years to keep the 125-year-old chain open.

More:
• Is Lampert finally giving up on Sears?
• Lampert ‘entirely committed’ to a reduced—and shrinking—Sears
• Our advice to Sears’ controlling shareholder

Brigid Sweeney contributed.

Sears Holdings store closing list on Scribd



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