Sears Holdings Corporation, the retailer chain store, run by hedge-fund manager Edward Lampert, posted a $454 million third-quarter loss as its shrinking store base hurt sales.
Illinois-based company said in a statement Thursday that the net loss of $4.26 a share compares with one of $548 million, or $5.15, a year earlier.
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According to Bloomberg, the results show Sears has a ways to go to returning to profitability. Lampert has spun off assets and sold stores, leaving a stripped-down retailer that continues to post declining same-store sales. Sears also is suffering from problems that are ailing the whole industry, including slowing mall traffic and consumers who are choosing to save more and to spend on experiences and services instead of goods.
In June, Sears formed a real-estate investment trust with about 250 of its stores, a move that raised $2.7 billion. While proceeds from that move and other asset sales have mitigated the company’s cash consumption, Sears has posted a combined $7.12 billion of losses in the previous four fiscal years, Bloomberg report.
Edward S. Lampert, Holdings’ Chairman and Chief Executive Officer, said, “We remain focused on restoring Sears Holdings to profitability by concentrating on our best stores, rewarding our best members and pursuing our best categories through innovative solutions to product and service offerings. Through deliberate strategic actions, notably with respect to our promotional design and marketing spend, we have made meaningful progress in our transformation and reported a fifth consecutive quarter of improved year-over-year results. As expected, the results of these actions have led to comparable store sales declines despite an increase in profitability.
“At the same time, we recognize a lot of work remains and we have brought in a number of experienced leaders to drive our business forward with a plan to win as a member-centric integrated retailer. As we head into the fourth quarter, we have intensified our focus on our product offerings and promotions in order to enhance member engagement and provide our members with the best experience possible throughout the holiday shopping season.”
Rob Schriesheim, Holdings’ Chief Financial Officer, said, “During 2015, we have enhanced Sears Holdings’ financial flexibility and achieved our objective of reducing our reliance on inventory as a source of financing with the completion of the rights offering and sale-leaseback transaction with Seritage Growth Properties which generated $2.7 billion in cash and the amendment and extension of the Company’s $3.275 billion asset-based credit facility.
“These actions helped us reduce our total domestic net debt level by $2.0 billion from the prior year third quarter. The completion of the tender offer earlier this quarter for $936 million of our 6 5/8% Senior Secured Notes will reduce our annualized cash interest expense by $62 million. We intend to continue taking significant actions to alter our capital structure, as circumstances allow, to position Sears Holdings for success and profitability, which could include further reductions in debt or changes in the composition of our debt.”
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