Sears CEO Eddie Lampert doesn’t seem to have much luck in the U.S. or Canada. The iconic retailer has been ailing the past few years in both countries. Sears Canada reported its ninth loss in 14 quarters as same store sales dropped 6.8% for the second quarter. Revenue fell 12%.
Management blamed a cold spring, but the excuse seems nearly laughable, albeit it is dark humor, since the company has posted sales losses for the last 6 years. That means Sears Canada must have had 6 cold springs, each one lasting an entire year. One actual reason for the decline, and not as temporary as April frost, is growing competition from Wal-Mart and Target as they move into Canada. Sears Canada cut 3, 000 jobs, which may cut costs, but is not likely to help Sears compete.
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Eddie Lampert discussed selling his 51% stake in Sears Canada, and Sycamore Partners might be willing to buy it, but it is hard to see how this classic but tired old store brand can be revived. Its numbers are even less appealing that its merchandise with with 30 consecutive quarters of falling sales for the Sears in the U.S. A Credit Suisse analyst declared Sears was “the worst service store in America.”
In addition to its other problems, Sears is overburdened with debt, and the sale of Sears Canada might be necessary to raise funds. The company recently added another $747 million to its debt, most of it the result of lost revenue for the quarter. Lampert has raised $665 million so far this year, helped by the Land’s End sale. However, Sear’s problems are probably not going to end any time soon.