Share “Sears 2Q loss widens on sluggish sales”

Sears 2Q loss widens on sluggish sales

Published on NewsOK Modified: August 21, 2014 at 8:31 am •  Published: August 21, 2014
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HOFFMAN ESTATES, Ill. (AP) — Sears Holdings Inc. recorded a hefty second-quarter loss Thursday on another sales slump, raising more concerns about the future of a company that once was a staple of American shopping.

The company, which operates Sears and Kmart, said it plans to do more cost-cutting to right the ship. That includes closing more stores beyond the 130 that it had announced earlier this year.

But investors weren't encouraged. They sent shares down 4 percent in premarket trading.

Sears, controlled by billionaire hedge fund investor Edward Lampert, lost $573 million, or $5.39 per share, for the period ended Aug. 2. That's more than double the loss of $194 million, or $1.83 per share, a year earlier. It marked its ninth straight quarterly loss.

Revenue declined 10 percent to $8 billion from $8.87 billion. One bright spot was online and multi-channel sales, which increased 18 percent.

The challenges facing CEO and Chairman Lampert are enormous. The company has been cutting costs, reducing inventory and selling assets to return to profitability.

At the same time, it's shifting its focus on running a store network to operating a member-focused business called Shop Your Way. But its biggest albatross remains its stores, which have been criticized for being outdated and shabby.

Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. But it has faced mounting pressure from nimbler rivals like Wal-Mart Stores and Home Depot.

Sears is also facing broader issues that are tripping up many other retailers. Like other stores catering to the low- to middle-income customers, Sears is grappling with a slowly recovering economy that's not benefiting all Americans equally. It also is wrestling with shoppers' shift away from physical stores to PCs and mobile devices for shopping and research.

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