Posted on 03/22/2017 6:47:54 AM PDT by Red Badger
After years of huge losses and store closings, the future is officially in doubt for Sears and Kmart.
Sears Holdings, the holding company for the two iconic retail brands, warned investors late Tuesday that it can’t promise it will stay in business.
It included the language in its annual report while insisting it might still turn things around.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” said the statement.
Sears Holdings said it can’t be sure it can raise the cash it needs through loans and debt financing. The company owes $4.2 billion, up from about $3 billion a year ago.
The company lost $2.2 billion in the fiscal year ending in January and has not turned an annual profit since 2010. Its losses since then total $10.4 billion.
Sears Holdings said its ability to sell assets, such as stores and store leases, could be limited because it needs those assets to pay for pension plans. In January, Sears sold its Craftsman brand of tools to Stanley Black & Decker. It is looking to sell Kenmore appliances and Diehard auto parts.
Sears Holdings has been in trouble almost since the 2005 merger that joined the two department store brands.
At the start of 2006, it had 3,400 U.S. stores and 370 more in Canada that it has since sold. By the end of this January, it had only 1,400 stores left, all in the United States. The company still has 140,000 employees, but that too is down sharply from the 355,000 it had in 2006.
Even that doesn’t tell the full picture of the decline.
Sears was once the nation’s largest retailer and business employer, both the Walmart and Amazon of its time. Its groundbreaking catalog business was how many Americans learned to shop from home for a large variety of items they wanted.
And it developed an extensive store network that helped furnish homes as Americans moved to the suburbs after World War II. It also caused trouble for small, locally owned shops.
The company at one time grew to include not just the retail business but a bank, a brokerage, a real estate company and what was then the world’s tallest building, the Sears Tower, for its Chicago headquarters.
But Sears began to suffer from competition from low-price competitors such as Walmart, and big-box stores such as Home Depot. It lost its place in the Dow Jones index of the nation’s most important companies in 1999.
Then came growing competition from Amazon and other online retailers. Analysts said Sears Holdings did little to invest in either the Sears or Kmart brand, instead trying to cut its way back to profitability by trimming advertising and closing stores.
It announced plans to close 150 more stores in January, and its stock hit a post-merger low in February. Then the stock rebounded when the company announced a deal with creditors to borrow $140 million more and cut at least $1 billion in operating costs a year, along with reducing its debt and pension obligations by $1.5 billion.
The “going concern” warning sent shares down 5% in pre-market trading Wednesday.
Allentown
Billy Joel
Well we’re living here in Allentown
And they’re closing all the factories down
Out in Bethlehem they’re killing time
Filling out forms
Standing in line
Well our fathers fought the Second World War
Spent their weekends on the Jersey Shore
Met our mothers in the USO
Asked them to dance
Danced with them slow
And we’re living here in Allentown
But the restlessness was handed down
And it’s getting very hard to stay
Well we’re waiting here in Allentown
For the Pennsylvania we never found
For the promises our teachers gave
If we worked hard
If we behaved
So the graduations hang on the wall
But they never really helped us at all
No they never taught us what was real
Iron and coal
And chromium steel
And we’re waiting here in Allentown
But they’ve taken all the coal from the ground
And the union people crawled away
Every child has a pretty good shot
To get at least as far as their old man got
But something happened on the way to that place
They threw an American flag in our place
Well I’m living here in Allentown
And it’s hard to keep a good man down
But I won’t be giving up today
And it’s getting very hard to stay
And we’re living here in Allentown
Written by Billy Joel • Copyright © Universal Music Publishing Group
Now that one I still play!
Me too!.................
The guy in charge never had a good plan, a real plan, or a clue to a plan. His “attempts” were no greater than throwing darts at a dart board and hoping some would score big. None ever did. Why? He had no real vision of how to totally remake Sears.
The biggest threat to Sears was that his merging it with K-mart was the opposite of any salvation. It was a stop-gap, a n expensive diversion, and a pretense behind the lack of any real clue.
Corporate Raider rule #1:
Sell everything that isn’t nailed down.
Corporate Raider rule #2:
Get a crowbar.........................
“The Sears association with Craftsman and Kenmore was a symbiotic relationship”
Good while it lasted. I remember when Sears sold cars (only briefly). Can’t remember it’s name.
#11 Remember Montgomery Ward?
Yes I do. I bought my first computer there in Dec 1995
A Packard Bell computer with the mouse with that hump that after a few hours it left your hand with muscle cramps.
https://c1.staticflickr.com/4/3017/2982910813_15edc8f53d.jpg
Similar pc I had... 2mb ram
http://s198.photobucket.com/user/piano_wizard/media/all%20computers/PackardBellPack-Mate5996CDT.jpg.html
http://packardbellblog.blogspot.com/
Sears will live on through Allstate ($30 billion market cap) and Discover Financial ($26 billion market cap). They also started WLS radio.
I am surprised that Allstate is still in business because brand loyalty means nothing to them. Actually they play that to their advantage... until people realize that they are getting ripped off and leave.
Allstate is a public company not assocoated with Sears and is the Second largestAuto insurer after State Farm
You are correct, however Sears would go to the top manufacturer and say we want you to take your best product, make these tweaks/additions/reductions and come up with a better product the we will brand it and sell it as “Sears Best”. Then consumers knew it was the best and could buy with confidence.
Allstate was started by Sears.
I remembered Kresge renamed itself “K-Mart” after I posted. So, yeah...just Woolworths. They used to have great lunch counters before there were five fast food joints every block. We also had really good Woolworths Garden Centers nearby but they are “Summerwinds.”
One of the main reasons malls and stores are dying is that women are afraid to go there. Between rampaging “teens”, shooters because malls are supposedly gun-free zones, Muslim terrorists, and the fact that women don’t know whom they or their daughters might encounter in a restroom, these stores and malls are doomed. The few times I must go to a mall, I am always looking around for possible threats, and I don’t go into the restrooms alone.
belated bump
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