Sears re­ports small de­cline in quar­terly sales

The Gulf Today - Business - - INTERNATIONAL -

NEW YORK: Sears Hold­ings Cor­po­ra­tion re­ported a smaller de­cline in quar­terly sales, but warned again that there is doubt about the com­pany’s con­tin­ued op­er­a­tion as it awaits ap­proval to sell some of its busi­nesses to its chief ex­ec­u­tive’s hedge fund.

“It is im­per­a­tive that the Com­pany re­duce debt, ad­just its debt ma­tu­rity pro­file and elim­i­nate the as­so­ci­ated cash in­ter­est obli­ga­tions,” Chief Ex­ec­u­tive Ed­ward Lam­pert said in a blog post on the com­pany’s web­site.

“We con­tinue to be­lieve that it is in the best in­ter­ests of all our stake­hold­ers to ac­com­plish this as a go­ing con­cern, rather than al­ter­na­tives that could re­sult in sig­nif­i­cant re­duc­tions in value.”

Sears is work­ing to trans­form its busi­ness by sell­ing brands like tool line Crafts­man and build­ing a stronger on­line pres­ence. Its mar­ket share has been hurt by dis­count chains in­clud­ing Wal­mart, and the surge in pop­u­lar­ity of on­line shop­ping has added to its woes.

It was the sec­ond time in two years that Sears has ex­pressed doubt about its busi­ness con­tin­u­ing as its losses mount.

“This year’s state­ment re­gard­ing its abil­ity to re­main a go­ing con­cern is more dire,” Ken Perkins, pres­i­dent of Re­tail Met­rics Inc. “It has liq­ui­dated its best as­sets and the cup­board is bare. These losses are un­sus­tain­able.”

Sears de­clined to com­ment. Sales at Sears’ es­tab­lished stores, in­clud­ing Kmart dis­count shops, fell 3.9 per cent in its sec­ond quar­ter, com­pared with a drop of 11.9 per cent in the first quar­ter, a pos­i­tive sign send­ing the 125-yearold re­tailer’s shares up 28 per cent in ex­tended trad­ing.

“Sears has closed hun­dreds of un­der­per­form­ing stores so its same-store sales should be much bet­ter than they have been as only their ‘stronger’ per­form­ing stores are in the mix,” said Perkins.

Sears said 149 stores will close in the sec­ond half of this year.

The com­pany’s net loss widened to $508 mil­lion in the fis­cal sec­ond quar­ter ended Aug. 4, from $250 mil­lion a year be­fore.

To shore up its fi­nances, the com­pany is con­sid­er­ing sell­ing its sto­ried Ken­more ap­pli­ance brand and home im­prove­ment busi­ness to Lam­pert’s hedge fund, ESL In­vest­ments, for as much as $480 mil­lion.

Last month, Lam­pert said he could close on a deal for the busi­nesses with an un­named part­ner by late Au­gust.

Reuters

Wash­ing ma­chines are dis­played at a Sears’ out­let in Cal­i­for­nia, US.

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