Make us your home page
Instagram

Sears dismal holiday season triggers store closings

A shopper walks out of a Sears store Tuesday in Milford, Conn. Sears Holdings remains the fourth-largest retail chain in the United States, with annual revenue last year of $43.3 billion. It employs about 250,000 people in the United States and Canada.

Getty Images

A shopper walks out of a Sears store Tuesday in Milford, Conn. Sears Holdings remains the fourth-largest retail chain in the United States, with annual revenue last year of $43.3 billion. It employs about 250,000 people in the United States and Canada.

Sears becomes the first chain to report taking its lump of coal during a holiday shopping season expected to turn out modestly better than last year for retailers overall.

Proving that a rising tide does not lift all boats, Sears Holdings Corp. on Tuesday said that its sales declined 5 percent so far this quarter, operating profits have been halved by discounting and a new round of cost cutting will include closing up to 120 of the company's Sears and Kmart stores.

It was bad enough to lead some analysts to say Sears' long-term troubles are coming to a head that will unleash more cuts.

Credit Suisse analyst Gary Balter sees "deepening problems at this struggling chain and renewed worries about Sears survivability."

"They've neglected this business for so long," retail analyst Brian Sozzi told Reuters, "They are letting Kmart and Sears die on the vine."

Sears stock, which had already lost half its value this year, dropped 27 percent Tuesday to close at $33.38, down $12.47.

The nation's fourth largest broad lines merchant with 900 department stores and 1,300 discount stores, Sears did not identify which stores will close.

But sales dropped 6 percent at Sears U.S. stores thanks mainly to plummeting television prices that forced many retailers to sell them at a loss.

At Kmart discount stores, sales were down 4.4 percent after more rivals relaunched layaway programs in a big way this year, a sales tactic for the credit-poor that Kmart once all but had to itself.

Meantime, Sears online sales are up 20 percent over last year, compared to 15 percent for all online retailers.

Sears, based in Hoffman Estates, Ill., has been shrinking since it was taken over by hedge fund manager Edward Lampert in 2004. Sears has steered clear of remodeling its old store base while transforming in slow motion from a real estate-based retailer to one more integrated with e-commerce and in-home services.

"Our past practice has been to keep marginally performing stores open while we worked to improve their performance," Sears said in a statement. "We no longer believe that to be an appropriate action in this environment."

"These actions will enable us to focus investments through integrated retail at the store, online and in the home," said Lou D'Ambrosio, chief executive.

Sears expects to churn up to $170 million in cash selling the leftover inventory in closed stores.

Information from the Associated Press was used in this report. Mark Albright can be reached at albright@tampabay.com or (727) 893-8252.

. By the numbers

In Tampa Bay area

7 Full-line Sears stores

10 Kmarts

3 Sears Outlets

200 People employed at a

typical full-line store

Sears dismal holiday season triggers store closings 12/27/11 [Last modified: Tuesday, December 27, 2011 9:47pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. In advertising, marketing diversity needs a boost in Tampa Bay, nationally

    Business

    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  2. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  3. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  4. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]
  5. Trigaux: Tampa Bay health care leaders wary of getting too far ahead in disruptive times

    Business

    Are attempts to repeal Obamacare dead for the foreseeable future? Might the Affordable Care Act (ACA), now in dire limbo, be revived? Will Medicaid coverage for the most in need be gutted? Can Republicans now in charge of the White House, Senate and House ever agree to deliver a substitute health care plan that people …

    Natalia Ricabal of Lutz, 12 years old, joined other pediatric cancer patients in Washington in July to urge Congress to protect Medicaid coverage that helped patients like Ricabal fight cancer. She was diagnosed with Ewing's sarcoma in 2013 and has undergone extensive treatments at BayCare's St. Joseph's Children's Hospital in Tampa. [Courtesy of BayCare]