Retail: Sears to sell stores after major loss
Sears Holdings Corp., “once a shining beacon in U.S. retail,” plans to sell or spin off many of its stores after posting a $2.4 billion loss in the fourth quarter, said Tiffany Hsu in the Los Angeles Times. The Hoffman Estates, Ill.–based company said it would raise $270 million by selling 11 stores to a real estate company, and also try to generate as much as $500 million more by spinning off its Hometown and Outlet stores. In late December, after a disastrous holiday season, the company announced that it would close up to 120 Kmart and Sears stores.
Extra cash may do little to halt the retailer’s slide, said Mae Anderson in the Associated Press. Industry analysts say Sears’s main problem is that “rivals have been able to lure customers away from the chain because of its drab stores and unexciting merchandise.” Every year, competitors like Walmart typically invest between $6 and $8 per square foot on improvements such as updating cash registers and repainting stores, say analysts; for the past few years, Sears has been spending only $1.50 to $2 per square foot a year on such things. “We think they’re going to continue to lose money,” says Michael Cipriani of finance firm Rosenthal & Rosenthal.
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