Sears Shareholders Seeing Red After Latest Loss (SHLD)

Sears Holdings recently announced results that revealed that the company had a $573 million loss in the second quarter of the fiscal year. Sears Holdings operates both Sears stores and Kmart stores. At Sears, sales at stores that have been open for more than a year increased by a paltry 0.1 percent. At Kmart, sales at stores that have been open for more than a year decreased by 1.7 percent.

Edward Lampert, CEO of Sears Holdings, said in a statement that the earnings results for the latest quarter were unacceptable. The disappointing results were attributed to numerous factors, including slowing electronics sales, increased promotional discounting, and lower grocery and household sales at Kmart. This latest loss is Sears’ ninth straight quarterly loss. Lampert, a hedge fund billionaire, was mainly responsible for the Sears-Kmart merger in 2005 and the company has failed to post a profit nearly every year since.

Some Sears shareholders feel as if they are watching the slow death of one of the most iconic retailers in America. Sears workers have also been disappointed in the company’s performance of late. Some are complaining that the morale of the employees are low, unreasonable sales targets are being pushed on the salespeople, and management seems directionless and reactive instead of proactive at solving recurring issues.

The company is focusing its efforts on the sale of underperforming assets, closing more unprofitable stores, and updating the brand’s image with consumers. Since the beginning of 2010, more than 300 Sears stores have shut their doors and another 130 or more are slated for closure during 2014. The company recently spun off Lands’ End after more than a decade of ownership.

The company will also be expanding its promotion of its “Shop Your Way” rewards program and increasing investment in its digital business. It remains to be seen whether the revamping of the brand’s image will translate into higher sales for the company.

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