A Bad Day For Sears

By Marcus Gilmer in News on Dec 2, 2008 10:10PM

This morning, Sears Holding Corp. announced a wider than expected quarterly loss - $146 million or $1.16 per share – resulting in the closing of eight more of its retail stores. This is a drastic difference compared to 2007’s third-quarter loss of $4 million, or three cents per share. These closings are in addition to 14 already in the third quarter. The Hoffman Estates-based company, which is controlled by hedge fund manager Edward Lampert, also approved a stock buyback plan of up to $500 million in common shares.

Revenue dropped eight percent to $10.66 billion from $11.62 billion as Sears' U.S. same-store sales slid 10.6 percent and Kmart same-store sales slipped seven percent. Total same-store sales – or sales at stores open at least a year, a key retail gauge – fell nine percent.

According to the company, the reason for the decline in sales is due to the trifecta of housing-related departments, lack of consumer spending and the shift in Sears’ promotion of certain goods.

To help prepare for the challenging holiday season, Interim Chief Executive and President W. Bruce Johnson said in a statement that Sears cut inventory, reduced expenses and brought back the layaway program at both Kmart and Sears locations to offer consumers another payment option. Not sure where layaway went, but it’s nice to have it back. A tough time for Sears, no doubt, but the company still managed to wrangle three new executives, according to a separate announcement.

Sears named three executives to join the company: Nick Coe, formerly with Banana Republic and Levi Strauss & Co., was named senior vice-president and president of Lands’ End. Lehman Bros. Holdings Inc. veteran Scott Freidheim was named executive vice-president/operating and support businesses, and Mark de Bruin was named senior vice-president and president of pharmacy.

Sounds like another example of the rich getting richer and the poor getting laid off from their jobs at Sears.

And that's not all: the company "confirmed that Deloitte LLP notified the Hoffman Estates-based retailer about improper trading of the retailer’s securities by a 'former advisory partner.' In its regulatory filing with the U.S. Securities and Exchange Commission, Sears Holdings didn’t disclose the name of the 'former advisory partner' but stated that he allegedly traded Sears’ shares in 2006 and 2008." The hits just keep on coming...

Post by Amy Wilschke