Sears’ third-quarter earnings followed the company’s downward financial trend, inspiring conjecture about the possibility of the company’s demise.
“Sears keeps promising investors a turnaround but its results only seem to get worse,” Fortune magazine says.
This month, Sears Holdings Corporation released financial results that showed continued revenue declines. The company’s revenue dropped to $5 billion, decreasing by about $721 million from the third quarter in 2015. Same-store sales dipped 7.4 percent, with a 10 percent decrease for Sears stores and a 4.4 percent decrease for its Kmart locations.
Operating fewer stores contributed to the declines, the company reports.
“In the movie ‘Titanic,’ there is a line where, realizing chaos is about to ensue, one character helpfully notes, ‘It’s starting to fall apart. We don’t have much time,'” Saunders says. “Such a sentiment could be well applied to Sears. The analogy with ‘Titanic’ is also apt; not least because while Sears was once a titan of U.S. retail, it now looks set to sink.”
To help reduce its losses, the company planned to close 64 Kmart stores in December, following the closures of dozens of Sears and Kmart locations earlier this year, CNBC says. Edward S. Lampert, Sears Holdings’ chairman and CEO, has discussed closures and other plans for improving the retailer’s performance.
“We remain fully committed to restoring profitability to our company and are taking actions, such as reducing unprofitable stores, reducing space in stores we continue to operate, reducing investments in underperforming categories and improving gross margin performance and managing expenses relative to sales in key categories,” Lampert says.
The retailer is also looking for ways to use its major brands as part of its recovery, potentially selling Craftsman, DieHard and Kenmore.
“There can be no assurance that we will complete one or more transactions, and we also intend to take actions on our own that present the opportunity to improve the economics of these brands and business, including potential externalization through non-Sears Holdings channels,” the company reports.