Sears 4Q loss narrows as it lowers expenses

Published on NewsOK Modified: February 27, 2014 at 10:39 am •  Published: February 27, 2014
Advertisement

NEW YORK (AP) — Sears Holdings Corp. reported a hefty loss in the fourth-quarter on a 14 percent sales drop, as the beleaguered retailer continues to struggle to bring shoppers into its stores.

But shares rose 5 percent in midday trading as the operator of Kmart and Sears stores narrowed its loss versus a year ago. It is also seeing rare sales growth this month.

Sears' Chairman, CEO and hedge fund billionaire Eddie Lampert called it a "tough to terrible" holiday season for the company. It underscores his challenges to turn around the business.

Lampert combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. It faces mounting pressure from nimbler rivals like Wal-Mart Stores Inc. and Home Depot.

Sears is shifting away from its focus on running a store network into a member-focused business. Loyal shoppers receive incentives to buy. Its results have been hurt as it continues traditional promotions while investing in its membership program dubbed Shop Your Way.

Sears has also been cutting costs, reducing inventory and selling assets to return to profits. It plans to spin off its Lands' End clothing business as a separate company.

"While transformations of this size are challenging, and our financial results do not currently reflect our progress in member engagement, we believe the changes we are making through Shop Your Way and integrated retail will benefit us in the changing retail landscape," Lampert said.

Sears noted that sales to Shop Your Way members accounted for 72 percent of all business from Sears' full-scale stores and Kmart stores in the fourth quarter, up from 58 percent a year ago.

Continue reading this story on the...