Sears Takes Steps to Right the Ship after Challenging Year
Feb 29, 2012
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Sears Holdings Corp. reported all-around declines in its retail stores' comparable store sales for the fourth quarter and full year 2011. Sears is one of the biggest major appliance retailers in the United States.
Sears domestic's comparable store sales were down 4.1% in the fourth quarter of 2011 and down 3.0% for fiscal 2011. Kmart's comparable store sales were down 2.7% in the fourth quarter and down 1.4% for fiscal 2011. Sears Canada's comparable store sales were down 7.5% in the fourth quarter and down 7.7% for fiscal 2011.
"We are taking immediate actions to address our fourth quarter performance including cost and inventory reductions, honed and targeted marketing, margin actions, and bringing in new talent to strengthen our merchandising and leadership team, like Ron Boire, who was recently named Chief Merchant and President, Sears and Kmart Formats," commented Lou D'Ambrosio, Sears Holdings' CEO and president.
D'Ambrosio added: "It's also important to distinguish between our earnings issue and the strength of our balance sheet, where we have significant assets and liquidity. We are further strengthening the balance sheet by approximately $1 billion through the actions we are announcing today regarding Hometown, Outlet, and Hardware stores, a real estate transaction, and inventory reductions."
Sears Holdings agreed to sell 11 Sears full line store locations to General Growth Properties for $270 million. Each of the Sears stores is part of an existing General Growth property. The stores will continue to operate as Sears stores into 2013. Final closing dates will be determined later in 2012.
Sears also announced a plan to separate its Sears Hometown and Outlet Businesses and some hardware stores through a proposed rights offering, expected to raise as much as $500 million.
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