More tough times at Sears as sales and profits fall… again
Sears Holdings Corp has posted yet another quarterly net loss and said it accepted additional debt finance from its controlling shareholder’s hedge fund.
The company, which this week announced a major new fashion initiative, drew on $300m of financing from billionaire CEO Edward Lampert’s fund, ESL Investments, after having said earlier this year it had received a $500m loan, part of it from the same hedge fund.
Sears posted a net loss attributable to shareholders of $395m/$3.70 a share in Q2, down from profit of $208m/$1.84 a year ago. Kmart sales fell 3.3% and Sears domestic comps fell a worse 7%.
Lampert said the chains are still under pressure in a “challenging competitive environment” as total revenue fell 8.8% to $5.66bn on the back of those comps falls and the firm’s store closure program. The gross margin fell to 22.2% from 23.1% a year ago.
More stores are to close and the company is also selling off assets with its Kenmore appliances, Craftsman tools and DieHard batteries brands on the block. It earlier spun off the Lands’ End apparel unit and most of its stake in Sears Canada.