- Category: Economic
- Published Thursday, February 25, 2016
- CTV News
NEW YORK -- Sears' fourth-quarter loss widened despite deep cost cuts and, after the struggling retailer limped through the crucial holiday shopping season, it promised to tighten spending even more this year.
Chairman and CEO Edward Lampert pointed to a warm winter that drove down sales for seasonal goods and brutal competition with other retailers, almost all of whom were forced into clear inventory by marking down prices drastically.
Shares rose 4 per cent before the opening bell Thursday after the company announced that a major shareholder in the company would take a seat on the board, which will be increased to 10 seats.
One of those seats will be occupied by Bruce Berkowitz, chief investment officer at Fairholme Capital Management LLC.
Fairholme owns a 26.3 per cent stake in the Hoffman Estates, Illinois, company, according to the data firm FactSet.
For the period ended Jan. 30, Sears, which also owns Kmart, lost $580 million, or $5.44 per share, compared with a loss of $159 million, or $1.50 per share, a year earlier.
If a one-time $180 million charge related to the impairment of the Sears trade name is removed, the per-share loss would have been $1.70 per share.
Revenue declined to $7.3 billion from $8.1 billion.
Sales at Kmart stores open at least a year dropped 7.2 per cent, while sales at Sears stores fell 6.9 per cent. Both were hit with weak consumer electronics sales, though the company said that that was actually an improvement from the first three quarters of the year.
Sears said earlier this month that it would accelerate the shuttering of some stores following the challenging holiday season.
The company for years has been searching for ways to compete with the Home Depots and Wal-Marts down the street, and with Amazon.com online.
Sears stores in many locations appear run down and it has tried to revitalize its image, but it's doing so in an environment in which it must reduce costs to mitigate its losses.
The company lowered expenses by about $150 million in the fourth quarter and estimates that it will further cut costs by $550 million to $650 million this year.
At the same time, it is promising to shake up sourcing, pricing and inventory to reinvigorate clothing sales.
Sears Holdings Corp. reported a full-year loss of $10.59 per share on revenue of $25.15 billion.