Can Sears survive? Some experts are skeptical
- Author: Zachary Reyes Mar 30, 2017,
Mar 30, 2017, 0:01
Shares of Sears Holdings Corp (NASDAQ:SHLD) traded down 12.31% on Wednesday, hitting $7.98.
Three other retail locations that Sears Holdings owns in SC also are going dark.
"When you're burning through $1.5 billion in cash every single year, how are you possibly going to survive?" asked Davidowitz.
The company announced in January it was closing another 150 stores, including a Kmart in Cheyenne, Wyoming.
Stores looking for prime space at the mall "will have incredible real estate opportunities", said the source.
The closures leave only four Kmarts in Louisiana: two in Metairie and one each in Mandeville and Lake Charles. The company traces its origins to 1886, when Minnesota railroad station agent Richard Sears bought an unwanted shipment of watches, then sold them "at a nice profit", according to the company's website. Sears has a longtime presence in Bakersfield, and is an anchor at the Valley Plaza mall. Houma has a Sears Auto Center. Sears Holdings has cut the number of its USA stores by almost a third, reduced holdings in Sears Canada, and spun off the Lands' End clothing chain.
Sears tried to soothe investors' fears, saying in a post on its website that it remains focused on "executing our transformation plan" and that news reports miss the full disclosure that it's highlighting actions to reduce risks.
The losses not only "fail to show even the faintest glimmer of improvement" in the retailer's sales, Saunders said, "but they are also a clear symptom of a business that is broken and now well beyond fix".
Lampert owned almost 10 per cent of the real estate investment trust (REIT) that paid Sears $2.6 billion United States in 2015 for the stores it purchased, many of which were then leased back to the retailer.
"They're past the tipping point", Ken Perkins of the research firm Retail Metics told the AP.
The end could finally be near for long-struggling Sears and Kmart.
The company, which has $13.19 billion in liabilities, said it could have difficulty procuring merchandise from vendors, and bondholders are watching to see whether Sears will have the cash and credit needed to stock its shelves for the crucial 2017 holiday season. With adjusting for one-time charges, the loss came to $887 million.
1927 Sears buys the Craftsman trademark for $500 and begins to sell power tools under the brand about two years later. But it says its pension agreements may prevent the spin-off of more businesses, potentially leading to a shortfall in funding.
"Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern", Sears said in a filing with the Securities and Exchange Commission.
2017 The company announces plans to cut $1 billion in costs by selling more store locations, cutting more jobs and putting more of its famous brands on the block. And it's reconfiguring its debts to give itself more breathing room. And while it's reconfiguring its debts, the bottom line is that Sears still needs to get more people coming through its doors or shopping for Sears brands online.
Sales at locations of Sears and Kmart that have been open at least a year dropped 10.3 percent in the fourth quarter of 2016, the Associated Press reports.