Holiday sales plunge at Sears U.S., Kmart stores
Daniel Acker/Bloomberg via Getty Images
By Phil Wahba

NEW YORK -- Sears Holdings' sales are slipping faster and faster.

The retailer Thursday reported declines in comparable-store sales at its Kmart and U.S. namesake chain for the crucial holiday season that were even sharper than for the third quarter.

At its U.S. Sears stores, sales at stores open at least one year, an industry benchmark known as comparable sales, were down 9.2 percent in the nine weeks that ended Jan. 6 and down 5.7 percent at the discount Kmart chain.

Sears (SHLD) shares were down 13.4 percent at $36.85 in after-hours trading.

Sales at the company have been falling since 2005, when billionaire hedge fund manager Edward Lampert merged the two U.S. chains in an $11 billion deal.

The retailer has closed about 300 U.S. stores since 2010, tightly managing inventory, selling real estate and shedding assets at home and in Canada as it tries to engineer a turnaround.
The company has about 2,000 Sears and Kmart locations in the United States.

"The results that we posted are not nearly what we want them to be," Lampert, Sears Holdings' chief executive officer and top shareholder, wrote in a blog post.

The company has made a big bet that its strategy to make targeted offers through digital and social means to members of its "Shop Your Way" rewards program, which generated about 69 percent of holiday sales, can fix the company.

In his blog, Lampert lamented that the holiday results "overshadow" the progress Sears had made with the program.

Lampert told Reuters in November he saw room for further store closings in 2014.

"They're not focused on executing at retail so that's why we've seen the business deteriorate," said Mary Ross Gilbert, a managing director at investment bank Imperial Capital.

Imperial has an underperform rating on Sears shares and a sell rating on its 6.625 percent bonds. Gilbert said that despite the holiday results, the company had enough liquidity in the near term.

Retailers faced the most promotional holiday season since the recession, trying to outdo one another with deep discounts to lure shoppers, adding further pressure to Sears and Kmart. As a result, a number of retailers cut their profit forecasts on Thursday.

Sears said it expects to post a lost of between $11.85 and $12.88 a share for the fiscal year ending Feb. 1. That includes a loss of $2.35 to $3.39 a share for the holiday quarter.

At Kmart, business fell in consumer electronics, groceries and toys, while at Sears it was down in electronics as well as home appliances, among other categories.

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Noma Jane

I like K-Mart so much better than Wal-mart but Sears appliance are not good like they use to be and they will put in used or recondition parts and the repairs do not last very long I have had horrible experience with their appliances.

January 11 2014 at 10:11 PM Report abuse +1 rate up rate down Reply

I used to do all of my shopping at sears for all of my automotive and househols items, untill I went to replace my homes water pump. I purchesed one, took it home, installed it and it lasted a very short time. I went back and bought a second one. (the warranty was still good) so given the fact that things can go bad, I took this one home. Whn I took this one out of the box I inspected it before I installed it.. This one had residu in the pipes and got me thinking, they are reselling used water pumps at retail prices. I was mad, took it back for another and told the salesman that I wanted to check this one before I took it home. The same thing so I demanded my money back and I would go elsewhere. That was the end of my 30 year relationship with Sears. I had major back issues so for me is wasnt only about the hassles of returning them. Before this I purchased a riding mower from sears and then being a new homeowner I had gotten the service contract on the mower too. When I had problems with the mower early on the service repair man looked at me with some dumb look like he didnt know how to fix it. What is a service contract for? I'm done with sears. They did themselves in. When a business does not treat the law abiding customers with dignity and respect, I take my business elsewhere.

January 11 2014 at 9:41 PM Report abuse rate up rate down Reply
Mary Beth

K-mart is horrible. I went in there recently-probably hadn't been there for 5 years, the experience was so bad-and 9 out of 9 items were rung up at the wrong price and the teller didn't seem to understand the problem. I left in frustration and will never go back.

January 11 2014 at 9:35 PM Report abuse rate up rate down Reply

Is it really any wonder? Their prices are out of line and their clothing is hideous!

January 11 2014 at 8:22 PM Report abuse +1 rate up rate down Reply

I shop at Kmart alot. I find the sales are really great and what my family asks for I get there. I do agree of some of the clothes have from some famous people are not what teens or people wear. Great mens clothing, Sports apparel and other products. Our Kmart is always busy and has alot of repeat customers. Can even shop online and have a great response and delivery. And yes there is layaway don't ever get rid of that.

January 11 2014 at 7:57 PM Report abuse rate up rate down Reply

My brother-in-law works at a Sears store and we have been telling him that he had better be looking for a new job, but he won't listen. We compare him to a stoker on the Titanic.

January 11 2014 at 6:26 PM Report abuse +1 rate up rate down Reply

I have not shopped at KMart since about 1988, when they refused to take a check for $5 because it had a PO box instead of my home address. I went to Sears because my truck needed an alternator on a Friday evening and my mechanic was closed until Monday morning. They did an ok job but I would not go there on a regular basis. In general, the products are crap and the service does not exist.

January 11 2014 at 5:30 PM Report abuse +1 rate up rate down Reply

To much made in China merchandise Ugly clothing line

January 11 2014 at 5:21 PM Report abuse +1 rate up rate down Reply
The Skiteks

I find it amusing that so many people are posting that they didn't shop at Kmart because of their offensive commercials....the one with the men in their underwear and jingle bells. Funny how I don't recall at any time reading posts that people refuse to shop at Victoria's Secret because of their offensive commercials with women parading around in their underwear. I find neither store's commercials offensive and was pleasantly pleased to see the Kmart commercial with the "jingling" men. That being said, I still didn't shop at Kmart because of their staying open on Thanksgiving day and their increasingly junkie merchandise. And I used to be a loyal Sears shopper...never left the store dissatisfied. I haven't shopped there recently but did go in after Christmas since I received a gift card. The customer service staff was horrible and I left when I saw that horrid Kardashian line of clothing. That, above all else, will keep me away from sears for good!

January 11 2014 at 3:11 PM Report abuse +1 rate up rate down Reply
1 reply to The Skiteks's comment

For the record, I don't shop VS either. But the article wasn't about them, was it?

January 11 2014 at 7:25 PM Report abuse rate up rate down Reply

It took my sister calling everyday, and basically harassing Sears to get them to come fix her dryer. She had several no shows and a few cancellations. They finally cameout after she told them she would be calling the media next.

January 11 2014 at 3:03 PM Report abuse rate up rate down Reply