Sears to 'Unload' 1,200 Stores?
Sears might "unload" 1,200 stores in an effort to raise money, the Wall Street Journal reported Thursday. A majority stakeholder in Sears Holdings Corp., which operates Sears and Kmart, is hoping to receive $770 million in cash related to the stores.
Sears Holdings Corp., based in Hoffman Estates, Ill., Thursday reported a significant loss for the fourth quarter after a difficult holiday shopping season. The company had a net loss of $2.4 billion for the quarter that ended Jan. 28, including several one-time charges, compared to a profit of $374 million for the same period last year.
Sales dropped $518 million to $12.5 billion last quarter. Officials have tried to turnaround the company as same-store sales have fallen for six straight years.
Sears describes itself as the country's "fourth largest broadline retailer with over 4,000 full-line and specialty retail stores in the United States and Canada," according to its website.
Meanwhile, department store company J.C. Penney, which launched a new pricing strategy Feb. 1, today reported a fourth-quarter loss of $87 million compared to net income of $271 million in the same period last year. Discount retailer Target reported net income declined 5.2 percent to $981 million from $1.04 billion a year ago, exceeding some analysts' expectations.
The Wall Street Journal reported Edward Lambert, chairman of Sears Holdings and CEO of ESL Investments, a hedge fund that controls Sears through a 61 percent stake, has plans to unload more than 1,200 stores, a plan that some interpreted as the beginning of the breakup of the company.
A spokesman for Sears said the company is not closing 1,200 stores.
Sears Holdings said Thursday it intends to separate its Sears Hometown and Outlet Businesses and certain hardware stores by selling their rights and hopes to raise $400 million to $500 million. The company also separately announced the sale of 11 Sears stores in nine states for $270 million. The sale to General Growth Properties is expected to close in the next 45 to 60 days.
Some retail analysts said the company's strategic financial plans might not solve its deeper issues of losing focus and shoppers.
"The image is atrocious. The stores are old and they're run down. They don't look like a nice place to visit," Ron Friedman, a partner in the retail and consumer products industry group of accounting firm Marcum, LLP, told the Associated Press. "I don't think that the Sears we see today can be around from a year today. It has to change."