Sears spirals toward oblivion
CEO Eddie Lampert can't apologize his way to growth any longer. His gasping retailer is now racing J.C. Penney to irrelevance.
Lampert has yet again apologized for quarterly results that were dreadful, even by the low standards of Sears. Lampert called them "unacceptable." Although that candor seems remarkable for a CEO, keep in mind that he has been saying more or less the same thing for years. It's easy to see why.
The venerable retailer lost $279 million, or $2.63 per share, versus net income of $189 million, or $1.78 per share, a year earlier. Revenue plunged by 9% to $8.5 billion. Same-store sales, a key metric of performance at stores open for at least a year, tumbled 3.6%.
Wall Street analysts had expected a loss of 60 cents per share on revenue of $8.74 billion. As earnings misses go, this one is gargantuan. Shares of Sears plummeted in early trading Friday, falling 14% to just below $50.
Gap (GPS) and Abercrombie & Fitch (ANF) also reported disappointing results on cooler-than-expected weather (an increasingly common theme among retailers), but Sears' struggles have been going on for years and seem to be accelerating. Lampert, who had no retail management experience, took over as CEO earlier this year from Lou D'Ambrosio, who resigned to take care of an ill family member.
"A company of our size and with our assets should be generating a significant profit," Lampert told analysts during the earnings conference call, adding that issues like weather have an "impact" on Sears. "But even with that impact, we should be doing a lot better than we are."
Lampert certainly can talk the talk, but investors have grown impatient waiting for the company's deeds to match his words.
Like J.C. Penney (JCP), Sears lacks a coherent brand identity. No one seems to know why anyone would shop at either chain. Now both are in a race toward irrelevancy that shows no signs of slowing. The only question is: Which of these venerable brands will wind up on the scrap heap first?
Jonathan Berr can't remember the last time he was in a Sears store. He doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.
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I think there are two tiers to the market right now. There is the $10 shirt/$25 jeans market, then there is the $50+ shirt/$100+ jeans market. Sears and JC Penny's seem to fall in the gap. Says some sad things about the state of the middle class as a whole.
Get rid of EDDIE LAMPERT and all of his top staff and maybe it will survive.
He ruined a great company.
There appliances are becoming junk you can't count on them to last more than a couple years, their electronics section has become a joke. Store set up is a futile maze with no walk ways through one department to another. And mens clothing looks like your in a walmart most of the time catering to the low income at high prices. I don't see them saving themselves because they haven't the insight to do what they need to a one time giant is reduced to nothing due to bad management and its the workers that are always blamed in this country.
You need to go back to the way Sears used to be. Hype up your website and start sending out some catalogs. Sears had a terrific catalog ordering system, when I was young. The store(s) were performing much better back than now. Same thing with JCPenney, got rid of their catalog(s) and now their struggling too. Create website incentives for customers to want to order from you.
Instead of selling regular style work clothes and shoes, Sears tries to hard to get the hip-hop crowd in a suburban mall. Try to find anything over size "L", good luck. Their cousin K-Mart had one store out of several that even had the bigger sizes.
Try selling to people, not images.
....competition is hurting both JCP and Sears..........
Like the auto industry which was dominated by the domestics through the 70's....then entered Toyota, Nissan, Hyundai, Kia, etc. In the 60's, GM had 65% market share....now they're under 20%.
Same story in retailing - Sears and JCP supplied middle america for decades....then came along Target, Wal-Mart, Kohls, Belks, etc. Now - many of the shoppers who used to patronize Sears....now go to Target for just about everything in household items and buy their clothing at Kohl's. I know, I do!
If I want higher quality garments, I then shop at Macy's. If I need home improvement items, garden items....then off to Lowe's or Home Depot. Electronics, TV;s etc. ....we look at Best Buy and then buy the items online at Amazon or New Egg.
Sears can no longer compete with these specialty chains as 40 years ago...they were the only game in town.....now they are not!! I have very fond memories of Sears, Roebuck and Co. and worked there part-time in high school. But it appears their longevity is now short-lived.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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