Sears to close 80 stores after loss widens in first quarter
Sears plans to close at least 80 stores this year after widening its loss in the first quarter of fiscal 2014.
Although same-store sales increased 0.2% for the quarter, the company’s net loss climbed to $402 million from $279 million in the prior-year quarter. Revenues declined 7% to $7.9 billion, from $8.5 billion in the prior-year quarter.
Sears attributed its continued decline in revenue to the closure of Kmart and Sears full-line stores, as well as the divestiture of its Lands’ End business. But according to a Reuters report, analysts pointed to the effect of promotional transactions on gross margin, with one analyst going so far as suggesting that the company’s new business model — namely Shop Your Way — may be doing more harm than good since the company offered deep discounts on “already promoted, low-margin items.”
"Sears is undergoing a significant transformation, and we fundamentally are changing the way we do business," said chairman and CEO Edward L. Lampert. "Our performance in the first quarter highlights the challenges we are facing as well as the progress we are making in this transformation. We are moving away from a company that was heavily based on selling products solely through a store-based network to a member-centric business model focused on providing benefits to our members anytime and anyplace. We are seeing progress in our transformation to a member-centric, integrated retailer, as we continue to invest heavily in driving our Shop Your Way program.”
Source: Retailing Today