Sears Holiday Season Sales Disappoint

Sears Holdings (NASDAQ: SHLD), parent company of Sears and Kmart stores, has suffered another disappointing holiday season, seeing a big sales drop. Overall same-store sales fell 16 to 17 percent for the first two months of the fourth quarter. The metric is a key indicator of a retailer’s health.

The company is seeking to refinance its debt. Being able to refinance would help the chain reduce cash interest expenses and extend maturities. In blog post, Chief Executive Officer Eddie Lampert wrote that, should the refinancing “not be fully successful, the Company’s Board will consider all other options to maximize the value of Sears Holdings’ assets.”

The department store chain hasn’t been able to move the needle on its sales. The company has not reported an annual profit since 2011, and sales have been in decline for a decade. In a regulatory filing last March, the company raised doubts that it may not continue as a going concern.

For the fourth quarter, the company now expects to book a fourth-quarter adjusted loss of $10 million to $70 million. The company reported a loss of $61 million a year ago. The company didn’t say when it would be reporting fourth-quarter and full-year results.

The company is now looking to improve the terms on more than $1 billion of debt. Sears has also raised $100 million in new financing and is pursuing an additional $200 million from other lenders. Sears said the funding would be supported by ground leases on its real estate assets and other “select intellectual property.”

Last week, Sears announced another round of store closures. The company said the closures are focused on some of its “lowest performing” locations. Sears is still planning to cut costs further in 2018. It estimates being able to trim about $200 million in expenses on an annualized basis, without accounting for any store closures.

Lampert is still claiming that the chain can turn itself around. Sears has launched some smaller concept stores and recently started selling some of its brands through Amazon. Sears is also interested in finding new ways of monetizing some of its own brands and assets. Still, the company’s shares fell more than 12 percent in the opening trading days of 2018.

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