Feb 26, 2015
Sears narrows loss with cost cuts, REIT to raise $2 billion
Feb 26, 2015
Sears Holdings Corp reported a narrower quarterly loss as it continued to slash costs and said it would launch a planned property trust by June, raising at least $2 billion for the struggling U.S. retailer.
The company, which owns the Sears and Kmart chains, said net loss attributable to shareholders was $159 million, or $1.50 a share, in the quarter ended Jan. 31, against a loss of $358 million, or $3.37 a share, a year earlier.
Sales at comparable stores dropped 4.4 percent during the quarter, with Sears showing a 7 percent decline and Kmart stores a 2 percent drop. Declines in electronics, auto and apparel contributed to the fall.
Led by Chief Executive Eddie Lampert, the company has been closing stores, cutting inventory and selling assets to cut costs and revive its business.
Once the largest U.S. retailer by revenue, Sears has seen sales drop due to stiff competition from Target Corp, Wal-Mart Stores Inc and Home Depot Inc.
Revenue fell 23.5 percent to $8.10 billion in the holiday shopping quarter. Of the decline in revenue of about $2.5 billion, $1.1 billion was related to Sears lowering its stake in Sears Canada Inc, $530 million to the spin off of Lands End Inc, and $497 million due to fewer stores.
Sears closed 234 underperforming Kmart and Sears full-line stores in 2014, leaving it with just over 1,700 stores in the United States.
In November, the company unveiled plans to sell about 200 to 300 stores to a real estate investment trust (REIT) in a move that would spin off prized assets to shareholders and could accelerate a breakup of the retailer .
Sears said Thursday it expects proceeds of more than of $2 billion from those sales and expects to complete the process in the first half of this year.
Sears' shares were up 3.6 percent in premarket trading Thursday on Nasdaq. They had closed at $37.90 on Wednesday.
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