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HOFFMAN ESTATES, Ill. — Sears Holdings Corp. posted a loss of $748 million in the third quarter as the retailer’s financial performance continued to deteriorate despite its efforts to shed underperforming stores, de-emphasize struggling categories and make money from its real estate holdings.
Revenue fell 13% to $5.03 billion in the three months to October 29. Sales at established stores fell 7.4% on weakness in apparel, groceries and consumer electronics. Same-store sales at Sears slid 10%, while Kmart comparable-store sales were off by 4.4%, the company said.
“We remain fully committed to restoring profitability to our company,” said chairman and chief executive Edward Lampert.
Lampert also addressed criticism from outside the company about Sears’ mounting losses and management’s inability to date to stanch the bleeding. “While many observers have acknowledged the significant asset base of our company, we understand the concerns related to our operating performance and are committed to transforming our company through our Shop Your Way membership program and our integrated retail investments,” he said.
Such efforts have so far failed to deliver a turnaround, said Neil Saunders, managing director of research firm Conlumino, in an email to Thomson Reuters. “This quarter shows no sign of even the mildest of improvements: On the contrary, the trends have worsened with the weakest comparable performance so far this year,” Saunders said.
In a note to clients, Saunders likened Sears to the Titanic, saying it “looks set to sink.”
Worries about the company’s financial health have prompted a few toy suppliers, including Jakks Pacific Inc., to suspend shipments to Kmart stores, The Wall Street Journal reported. The newspaper said the move signals trouble for Kmart ahead of the holiday season, when about 50% of all toy sales are made.
Jason Hollar, chief financial officer of Sears, said the company will “continue to take actions to generate liquidity, adjust our overall capital structure and manage our business while meeting all of our financial obligations. Actions may include additional expense reductions, financing transactions and asset monetization including exploring alternatives for our Kenmore, Craftsman and DieHard brands, our Sears Home Services business and our real estate portfolio.”
