Sears stumbles yet again
Will Eddie Lampert's retail empire ever get its act together?
Sears Holdings (SHLD) CEO Lou D'Ambrosio deserves credit for not sugar-coating lousy quarterly earnings. Too bad talk is cheap.
The struggling retail empire controlled by investor Eddie Lampert reported a net loss of $421 million, or $3.95 per share, significantly worse than the loss of $218 million, or $1.98, a year earlier. Sales slumped for the 19th straight quarter, tumbling 1.2% to $9.57 billion.
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D'Ambrosio, who joined Sears earlier this year from the technology and telecom firm Avaya, and Lampert are trying to turn around the 125-year-old company by emphasizing e-commerce, smaller stores and licensing deals. The efforts have yet to bear much fruit, a fact that D'Ambrosio understands.
"While we are not satisfied with our performance, we saw improvement in some core areas," he said in the earnings press release. "Sears full-line stores saw improvement, as Sears apparel achieved both comparable store sales and margin rate increases in the quarter," he added.
Of course, the key metric -- same-store sales -- was awful. Domestic store sales fell 0.7%, Kmart's comparable store sales declined 0.9% and Sears Canada same store sales declined 7.8%.
Though weak consumer confidence is hurting retailers, some Sears competitors are faring better. Target (TGT) yesterday reportedbetter-than-expected third quarter results, fueled by a 4.3% increase in quarterly comparable-store sales. Dollar Tree (DLTR) earnings also surpassed Wall Street expectations as same-store sales surged 4.8%.
Investors, who have seen the value of their shares tumble more than 60% over the past 5 years, have grown tired of waiting for Sears to reinvent itself. Now they are going to have to wait longer to recoup their investments.
D'Ambrosio said in the earnings release that Sears is "investing in our future" through "innovative" technology. Wall Street analysts have an average price target of $43, about $20 under where it trades today, indicating that they have little faith that Sears will ever rebound.
Probably the best that Sears can do is clean its balance sheet in preparation for a sale to a private equity player or a larger rival.
Disclosure: Jonathan Berr owns shares of Target.
K-mart: 5 minutes to find your shopping items, 30 minutes to check out. sure....i go there "often" (not)
Wake up Sears and Kmart.
i boycotted sears ever since 1989. almost screwed by their auto service people on a new di-hard battery that they tried to say was a "loaner" after it stopped working. this was the last straw of SEVERAL events. i'm stunned they are still around all these years. no store stands out more as having such poor service.
used to be you had to go to several check outs to check out. (hardware in hardware. clothing in clothing, etc). if you bought equipment (had an old outboard motor) that neded spare parts the service center was only open weekdays 9 to 4 WHILE I WAS AT WORK! then typical spare parts had to be placed on order. warantee paperwork miss spelled my name and they said they couldn't fix it.
local to me the sears store is a ghost town. hardly an "anchor store" anymore
Sears used to give and mail coupons applicable to EVERYTHING, including clearance, sale, and regular merchandise. Now their coupons are only for regular-price merchandise. Meanwhile, all of their clearance and sale merchandise sits taking up space in the store. Bring back the GOOD coupons and we will buy. I used to buy a lot of merchandise when it was on clearance IF I had a coupon which would help with that. Give and send the coupons and the merchandise will move. One doesn't have to be an executive to figure that one out. Even my housekeeper who is from El Salvador recognizes that fact. She has also stopped buying because of the lack of good coupons. Also, bring back the long-term, no interest, FREE delivery on appliances and other large items. I know many people who have decided not to buy any of those items at Sears because those incentives have been taken away. PAY ATTENTION, SEARS EXEC'S!!!!!!
Also, lower your interest rates on your credit cards!!
Yeah, go to ecommerce. Guaranteed death sentence, especially when they have no one qualified to actually help a customer find what they need.
I would love to shop at Sears here in my local community but I hate the delivery charges, we are 1.2 miles from the store.......also, when I call for service its like a grand inquisition before you can shedule an appt.
marketing class 101 says a dissatisfied customer will repeat their story to at least 20 people while a satisfied one only speaks to fewer than 5. it's a shame these stores never took any marketing 101 classes.
The LAST time I purchased anything from sears it was a dishwasher and when they installed it they damaged my kitchen counter and refused to repair it. I will never buy anything from there again and I tell this story every chance I get.
I know that in our family, when you needed to buy anything, the very first thing we did was to look in the Sears catalog (and maybe Montgomery Ward and Penney's catalogs, too). Then you probably went to the Sears store to see if they had it in stock so you could actually see the item and check if the store price was any higher than the catalog price. If you didn't buy the item off the floor for some reason, you stopped by the catalog order desk to order it before you left the store.
They had you coming and going and people loved it! I'll bet that same scenario played out in millions of families across the nation every day. Their catalog system was a priceless asset to the company and they dumped it!
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The solid report comes a month after the retailer closed all of its Canadian operations.
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