Sears stock rises as stores nix layaway fees

The struggling retailer pleases shoppers and shareholders alike.

By InvestorPlace Sep 7, 2012 11:45AM

Sears store in Milford, Connecticut Spencer Platt, Getty ImagesBy Alyssa Oursler


investorplaceSears Holdings (SHLD) has been the subject of some not-so-pretty headlines lately, but the company's moves this week have customers and investors alike smiling.

 

Most recently, it announced that its Kmart stores will no longer charge layaway fees year-round.

 

The move comes as several other retailers have also adjusted their fee rates. Toys "R" Us, which is owned by Vornado Realty Trust (VNO), for example, dropped the fees for its holiday program earlier this week, while Wal-Mart (WMT) reduced fees and expanded layaway options for the holiday season as well. And Best Buy (BBY) and TJ Maxx (TJX) are also pushing layaway as an appealing shopping option.

 

The layaway wars, as they have been called, are just the beginning of the battle for Christmas customers and a continuation of what has been a battle for penny-pinching shoppers.

 

On top of the good consumer news, investors also cheered as the company's chairman Eddie Lampert bought back 2.39 million shares Thursday. SHLD saw double-digit gains, as investors saw the purchase as further proof Lampert might be planning to take the company private.

 

There have been other moves supporting that possibility recently, such as the company's announcement that it will spin-off its Hometown and Outlet stores and discussion that it may sell its Lands End brand, which has accounted for half of the struggling store's profits.

 

Last quarter, Sear posted a loss of $132 million dollars, while sales fell more than 6% year-over-year and missed expectations. Still, the loss was less-than-expected and at least sent shares in the right direction.

 

Just a few weeks after the jump, though, the company was removed from the S&P 500 and shares moved downward pretty steadily since then.

 

Until now, that is. The company's latest announcements gave SHLD a boost, bringing its three-month gains to just under 14%.

 

Those who don't really care about the company's stock going up can still at least be happy its stores' shopping fees are going down -- and just in time for the holidays.


As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.


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27Comments
Sep 7, 2012 3:15PM
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Some people are so ignorant! Its not like some people can't afford to buy it right then and there. So you pay for it over a 4-8 week period, what exactly is the big deal? Layaway is excellent during christmas time! Its alot better than living off of credit cards where you are paying high interest rates. What do you ignorant people think about that because if you can't afford it you shouldn't be putting it on credit cards either. Just a thought before you start judging people who use layaway.
Sep 7, 2012 1:53PM
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Should'a put my first marriage on 12 year lay-away. Would have saved me a lot of grief.
Sep 7, 2012 3:44PM
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Layaway isn't just for people who can't afford stuff. It works for the birthday or Christmas presents you don't want you nosey 12 year to find! Some of you people are ignorant ___holes!
Sep 7, 2012 3:47PM
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I use it to hide christmas or birthday presents, pick it out lay it away pick it up when I need it.
Sep 7, 2012 4:02PM
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I refuse to go to Kmart any longer. If I go in for even one quick item, I have to play 20 questions at the register. It's like the old Radio Shack days. Rewards card, survey, bonus club, on and on.  Every time. I just want to pay and get out of there. So now I just don't go in.
Sep 7, 2012 4:00PM
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K-Mart is alive and well here in south Texas and thriving! the heck with Wal-Mart. 8=====D
Sep 7, 2012 5:20PM
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We consumers need all the help that we can get in this economy. Good news for all of us with children  and Christmas is only 3 months away.
Oct 17, 2012 3:27PM
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Allready then, you've all had a say. I'm building a home to be completed in two months. Took advantage of high % discount on appliance sale with 20% down and equal payments every two weeks, while Sears holds my appliances until house is completed. In mean time my monies collect % in my savings. A win win situation.
Sep 7, 2012 3:22PM
Sep 7, 2012 1:51PM
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zoomanto -- What a wonderful idea. If they'd lay it away for 15 years, I could pick it up and have a Show-Room new 15 year old car!

 

I going down to a dealer to discuss this and start putting away, let's see, about $3,000 a year. Wait. I don't have $3,000 to put away. Better make that lay-away 30 years. Yeah.

Sep 7, 2012 2:47PM
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You people can't afford something do not buy it! Simple math.
Sep 7, 2012 1:56PM
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What is up with layaways?  People, if you can't afford to pay for it, don't buy it.  Simple.

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