The news at a glance

last updated 8 January 2015

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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Euro crisis: Germany backs Greek lifeline

German lawmakers voted to approve a $175 billion bailout package for Greece this week, but Chancellor Angela Merkel faces resistance to any future aid, said Kate Millar in Agence France-Presse. More members of her coalition voted “no” than did so last September on a related measure, and Interior Minister Hans-Peter Friedrich “caused a stir” by suggesting that Greece would be better off leaving the euro zone. Rebellious allies could make it hard for Merkel to increase the size of the euro bailout fund, which is a precondition to securing more IMF aid for Europe.

Internet: Web giants support a ‘do not track’ button

The Obama administration unveiled a “consumer privacy bill of rights” last week, said Hayley Tsukayama in The Washington Post. The proposal outlines seven consumer rights that Internet companies should voluntarily respect, including easy-to-understand privacy policies and the ability to opt out of online data collection. The Digital Advertising Alliance, which includes Google, Yahoo, and AOL, said it would support a “do not track” button, to be embedded in most Web browsers. That would allow consumers to stop data collection for use in personalized advertising, but companies could still collect information for general market research.

Housing: A promising sign of recovery

In a sign that the housing market may be turning a corner, sales contracts on previously owned homes reached a nearly two-year high in January, said Derek Kravitz in the Associated Press. The National Association of Realtors said this week that contract signings, which “typically indicate where the housing market is headed,” rose 2 percent last month and reached the highest level since April 2010. Easier lending criteria and the improving labor market are believed to be behind the upturn.

Investing: Buffett stays mum on successor

Warren Buffett has chosen a successor, but even the heir apparent is still in the dark about his future role, said Ben Berkowitz and Chris Kaufman in Reuters.com. Buffett wrote in his annual Berkshire Hathaway investor letter last week that he had a person in mind to succeed him as CEO of his investment company, but the individual had not yet been approached. Buffett rejected suggestions that he should publicly identify the person, saying that there is a disadvantage to having a “crown prince” in place.

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