The Canadian Press - ONLINE EDITION

Sears 2nd-quarter loss widens as retailer continues to deal with sluggish sales

  • Print

HOFFMAN ESTATES, Ill. - Sears Holdings Inc. recorded a hefty second-quarter loss Thursday on another sales slump, raising more concerns about the future of a company that once was a staple of American shopping.

The company, which operates Sears and Kmart, said it plans to do more cost-cutting to right the ship. That includes closing more stores beyond the 130 that it had announced earlier this year.

But investors weren't encouraged. They sent shares down 4 per cent in premarket trading.

Sears, controlled by billionaire hedge fund investor Edward Lampert, lost $573 million, or $5.39 per share, for the period ended Aug. 2. That's more than double the loss of $194 million, or $1.83 per share, a year earlier. It marked its ninth straight quarterly loss.

Revenue declined 10 per cent to $8 billion from $8.87 billion. One bright spot was online and multi-channel sales, which increased 18 per cent.

The challenges facing CEO and Chairman Lampert are enormous. The company has been cutting costs, reducing inventory and selling assets to return to profitability.

At the same time, it's shifting its focus on running a store network to operating a member-focused business called Shop Your Way. But its biggest albatross remains its stores, which have been criticized for being outdated and shabby.

Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. But it has faced mounting pressure from nimbler rivals like Wal-Mart Stores and Home Depot.

Sears is also facing broader issues that are tripping up many other retailers. Like other stores catering to the low- to middle-income customers, Sears is grappling with a slowly recovering economy that's not benefiting all Americans equally. It also is wrestling with shoppers' shift away from physical stores to PCs and mobile devices for shopping and research.

Lampert said in a statement that the second-quarter performance was unacceptable even though he also said the chain has showed progress.

"I am personally committed to investing in and driving our transformation, improving the profit performance of the company, ensuring our financial flexibility, all while creating shareholder value," said Lampert in a prerecorded call.

Sears said it is still looking at options to sell its auto centre business and Sears Canada operations. It recently spun off clothing business Lands' Ends as a separate public company.

Sears also said it plans to improve pricing and promotions. And it said will continue to invest in its member-focused business called Shop Your Way where members receive incentives like extra discounts.

Sales to Shop Your Way members climbed to 73 per cent of eligible sales, compared with 71 per cent a year earlier.

Sales at Kmart stores open at least a year fell 1.7 per cent.

At Sears locations, the figure edged up 0.1 per cent. Sales at stores open at least a year is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Its stock declined $1.44 cents to $34.51 in premarket trading.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

HSC ready for Ebola

View more like this

Photo Store Gallery

  • Susan and Gary Harrisonwalk their dog Emma on a peaceful foggy morning in Assiniboine Park – Standup photo– November 27, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Aerial view of Portage and Main, The Esplanade Riel, Provencher Bridge over the Red River, The Canadian Museum for Human Rights and The Forks near the Assiniboine River, October 21st, 2011. (TREVOR HAGAN/WINNIPEG FREE PRESS) CMHR

View More Gallery Photos

Poll

Are you still on the Bombers' and Jets' bandwagons?

View Results

View Related Story

Ads by Google