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Sears to Close 28 More Kmart Stores as Revenue Plunges 22 Percent

Image: Sears to Close 28 More Kmart Stores as Revenue Plunges 22 Percent
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Thursday, 24 Aug 2017 09:15 AM

Struggling U.S. retailer Sears Holdings Corp. reported a quarterly loss on Thursday as fewer customers visited its stores and as the company offered more discounts amid intense industry competition.

The retailer also said it would close 28 Kmart stores later this year, in addition to the 150 Sears and Kmart stores it plans to close by the end of its third quarter. That will bring the number of Sears and Kmarts stores closed this year to 358.

"(L)ater this morning we will be notifying associates at 28 Kmart stores that we will be closing these stores later this year, as we continue to transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members," CEO Eddie Lampert said in a report to shareholders.

The company, which will still have about 1,000 stores after the closures, said in a public filing that it believes it has at least another 12 months of cash to continue operating, USA Today reported.

"We will continue to right-size our store footprint to ensure we are positioned to meet the realities of the changing retail environment,'' Rob Riecker, Sears Holdings' chief financial officer, said in a call with investors.

Sears it is betting on a customer loyalty program, Shop Your Way, to help lead a turnaround. The company also recently won investors' favor with a deal to sell its Kenmore appliance brand on Amazon, providing some relief.

Sears said sales at stores open for at least a year fell 11.5 percent in the second quarter ended July 29.

Total revenue fell 22 percent to $4.37 billion, mainly due to store closures, which shaved off $770 million of revenue, the company said.

Once the largest U.S. retailer, Sears has struggled with years of losses and declining sales as shoppers shift from the mall to the web, Reuters reported.

In February, the company said it would cut at least $1 billion in costs this year, mainly by monetizing its real estate.

Sears, controlled by billionaire investor Eddie Lampert, said it earned $460 million in cash from real estate deals in the second quarter.

Net loss attributable to Sears 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.

The company also said it had signed a deal with MetLife to reduce its pension liabilities.

The agreement will annuitize an additional $512 million of Sears' pension liabilities, with MetLife paying future pension benefits to about 20,000 retirees. 

Shares of Sears were last trading up around 2 percent in premarket hours Thursday on the news.

(Newsmax wires services contributed to this report).

© 2017 Thomson/Reuters. All rights reserved.

   
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Struggling U.S. retailer Sears Holdings Corp. reported a quarterly loss on Thursday as fewer customers visited its stores and as the company offered more discounts amid intense industry competition.
sears, kmart, stores, revenue, sales, earnings
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2017-15-24
Thursday, 24 Aug 2017 09:15 AM
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