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Sears CEO Eddie Lampert said that his company has been “working hard to transform its business and unlock the value of its assets,” which includes a shift from traditional retailing to a more member-centric company. Despite these changes, things are looking bleak for the once vibrant company.
“The journey to running a member-centric company on a consistently profitable basis has taken far longer than we expected,” Lampert said in a lengthy blog post. “Like many other brick and mortar retailers, Sears has encountered very substantial obstacles to profitability as a result of the enormous changes to the retail environment caused by the ever-increasing trend to online shopping.
"We anticipated these changes and reorganized in light of them, but have yet to achieve the results that we desire.”
According to the Sears Holdings report, the company saw a net loss attributable to Holdings’ shareholders of $508 million in the second quarter of 2018, compared to a net loss of $250 million last year. Sears generated total revenues of approximately $3.2 billion in the second quarter this year, as opposed to the $4.3 billion generated in the second quarter of 2017.
In an effort to return Sears to profitability, they’ve been strategically closing unprofitable stores, liquidating inventory, reducing their workforce and selling properties when the deals are favorable. They are also attempting to forge partnerships with major brands, while expanding their current partnerships.
“We understand that the actions we have taken to meet our immediate liquidity needs have impacted our efforts to achieve a more competitive and profitable company,” Lampert added. “The reality is that, while we strongly believe in our vision and our strategy for the Company, we also have had to address the pressures that result from the unsatisfactory operating performance as well as the ongoing burden of our legacy pension liabilities.”
Last year, Sears officials said there was “substantial doubt” the company would be able to stay in business and sustain as online sales and chains such as Walmart continue to take over the market. Sears has reportedly lost billions of dollars in the past few years.
Despite the changes, as many as 150 stores are expected to close by years end. It’s stock, which once traded for more than $100 a share, continues to plummet, down to $1.21 per share as of this week.
“The actions we have taken over the past several years have so far provided Sears the runway it needed to engage in value-maximizing transactions. We understand that the actions we have taken to meet our immediate liquidity needs have impacted our efforts to achieve a more competitive and profitable company,” Lampert noted. “The reality is that, while we strongly believe in our vision and our strategy for the Company, we also have had to address the pressures that result from the unsatisfactory operating performance as well as the ongoing burden of our legacy pension liabilities.”
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