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.
I like seeing pandering businesses shrivel up and die.
I didn’t know Sears was still in business.
another business a victim of Obamanomics.
I am well aware there are challenges in the marketplace, and some “creative destruction” is part of the limited type of “capitalism” we now practice in the United States.
The fact is this: the federal government’s chief executive post was occupied for 8 years by the most anti-growth, anti-capitalist and anti-business clown in the history of the republic. Any positive movement that could’ve been made to relieve all businesses of regulation, taxes, and other handcuffs was stopped—and in many instances REVERSED.
Sears may have died with or without the Valerie Jarrett man child...but one thing is certain: the bad situation was exacerbated by the feds from 2009 to 2016.
When I was my daughter’s age, the stores near me included W.T. Grant (where I got my first credit card), Lit Brothers (where I worked two Christmas seasons), John Wanamaker (where my father worked in TV repair before I was conceived), A&P, and Sears (where I worked for seven years during and after college). They are all about to have one other thing in common.
Instead of ‘feds’, it’s the DEMOCRATS..............
Substantial doubt?
It’s all over except for the wake.
Those three things were the core of the company. Time to pull the plug.
Well, does Eddie Lampert have ‘substantial doubt’ that he knows anything whatsoever about running a business? Don’t answer that question....
I’ve only been in a Sears once in the last several years, but I didn’t buy anything.
Remember Montgomery Ward?
Sounds like you are from the Philly area....
In Central Indiana, my parents dragged me to Central Hardware, L. S. Ayres, Wm. H. Block, Hook’s Drugs, Woolworth/Woolco, Vonnegut’s, B. Dalton Booksellers, Ed Schock’s Toy & Hobby Shops, G. C. Murphy Company. Well, the Hobby Shop and bookstore they didn’t have to drag me to.
But they are all gone. Businesses come and go. They don’t last forever. Only bureaucracies do that.
I’ve bought their detergent for forever. The 40 lb box lasted me almost a year. I hate that coming to an end.
Oh, so it’s all YOUR fault!..................B^)
It's over.
Call in the auctioneers and the lawyers and accountants and save back a modest cash bonus for whichever of them stays all the way thru to turn out the lights after the shelves are empty.
Everything Kmart touched turned to crap. Their glory days were short lived. So when Kmart acquired Sears the writing was on the wall. Indeed Sears might not have made it anyway given the bad climate for department stores. But Kmart can’t find it’s corporate ass in a dark room. It was over for Sears the moment the merger took place.
I miss the old soda fountains at Woolworths.
I bought a lawnmower from Montgomery Ward in 1987. About five years ago when I was washing it off, the young man who cuts grass in the neighborhood came to look at it; he’d only seen photos of them, never saw one that still ran. It finally died three years ago when the wheel mount broke off the deck. I’d say 25 years is a good service life.
1) FIRE THEIR CEO
2) DECLARE THEIR UNDYING LOVE FOR TRUMP AND HIS SUPPORTERS
That will fix everything
(no, I am not joking)
Where am I going to buy good sturdy clothing that does not cost an arm and a leg now?
Even my daughters end up liking the stuff I got for them there- the tissue-paper thin clothing from the specialty stores that have a small number of items on a table and hundreds of fragrance bottles never lasts.
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