Q1 Loss Up at Sears; Company Closes Stores

Sears HoldingsHOFFMAN ESTATES, Ill.-Sears Holdings said its first-quarter net loss totaled $402 million, compared to $279 million last year, and added that it has closed about 80 underperforming stores this year and may close more during the remainder of the year.

Edward Lampert, chairman and CEO of the Sears/Kmart parent, said the first quarter reflected the challenges the company faces as it changes its business model. Sears Holdings has been transforming from a store-based network to a member-centric model keyed around its Shop Your Way program. Member sales grew from 68 percent of total sales in last year's first quarter to 74 percent this year, Lampert said, showing the progress of this transformation.

Overall merchandise sales and services fell 6.8 percent to $7.9 billion in the quarter, which ended on May 3. Same-store sales at Sears' U.S. stores edged up 0.2 percent, while at Kmart, same-store sales were down 2.2 percent.

Gross margin dropped 230 basis points to 23.2 percent. Selling and administrative expenses were slimmed by 5.8 percent in dollars but gained 30 basis points as a percentage of sales, to 26.5 percent.

Rob Schriesheim, chief financial officer, said Sears Holdings will continue to close unprofitable stores as leases expire, "and in some cases will accelerate closings when appropriate." Schriesheim added that the company is still evaluating its alternatives for the Sears Auto Center business. The company completed its spinoff of Lands' End during the first quarter.

HFN Staff | News & Commentary

HFN provides detailed information on the key home classifications: Housewares, Tabletop, Floor Covering & Rugs, Furniture, Home Textiles, Lighting, Home Decor, Mattresses & Bedding, Gifts, Major Appliances and Consumer Electronics as well as Business, Finance and Retail.

Videos

Subscribe to
HFN Omnichannel
Receive the news you need to know about the trends in the industry delivered right to your inbox.

Current Issue

  • HFN May digital issue

    HFN's DIGITAL EDITION

    May 2017


    COVER STORY: HFN Turns 90

    We commemorate HFN's 90th anniversary by paying tribute to the iconic retailer and supplier brands--and the people--that have helped the industry flourish, then and now.


    ALSO IN THIS ISSUE:

    • Up & Coming Leaders - The home industry is in capable and visionary hands as this year’s 40 Under 40 list attests. Today’s young leaders span all disciplines and varied levels of operation.
    • Omnichannel Retailing - In the Mobile App World, Time is Money