Sears Loses $56 Million In The First Quarter, Experts Say Kmart May Have To Go

[store215]

Sears Holdings swings to 1Q loss on slumping sales

By ASHLEY M. HEHER – 6 hours ago

CHICAGO (AP) — Retailer Sears Holdings Corp. posted its second quarterly loss since Kmart acquired Sears stores in 2005, saying Thursday that it lost $56 million in the first quarter and fell far short of Wall Street forecasts.

The surprise results, coupled with a dour outlook for the remainder of the year, sent shares down more than 4.3 percent in morning trading.

The retailer led by financier Edward Lampert said its performance equated to a loss of 43 cents per share — a dramatic decrease from a year-ago profit of $223 million, or $1.45 per share. On an adjusted basis, Sears reported a loss of 53 cents per share for the three months ending May 5, compared with profits of $1.15 per share in the same period last year.

Sears said its customers were forced to spend more of their money to cover the soaring costs of gas and food, which knocked down sales nearly 6 percent to $11.1 billion.

Analysts surveyed by Thomson Financial expected profit of 15 cents per share on sales of $11.41 billion.

Howard Davidowitz, chairman of retail consulting firm Davidowitz & Associates, said he thinks Lampert will need to dramatically realign business units — and even consider shutting down the discount Kmart brand — if the retailer has any hope of remaining viable to the American consumer.

"It's going to get a lot worse," he said. "Given these results, I think Lampert really has to now face up to major, major store closings."

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Something has got to happen soon...either Kmart is going, Sears is going, or both. There is no way a company can survive losing that much money.

[Zayre88]

With the Economy, gas prices, food cost and other things ... people will cut big spending (home appliances) and head to stores with low prices, this usually means anywhere but at Sears and Kmart.

[NJxxJon]

Originally posted by Zayre88
With the Economy, gas prices, food cost and other things ... people will cut big spending (home appliances) and head to stores with low prices, this usually means anywhere but at Sears and Kmart.

....Um, Wal-Mart. Theres only one K-Fart and its 18 miles about from my house. Now, 2 (hate to say this) Wallos Are 15 miles from me.

[beachgal26]

I know that most of you will agree with me that it was a bad idea for Sears to take on the debts, problems that have faced K-Mart for years.  While the stores in FL were all well-stocked and maintained in the 80's and 90's, all the ones that I ever encounted in TN were run-down and had a "second hand store" look to them that just brought them down.  (In addition, I don't think that I've ever seen such rude employees as I did at our local store.)

Well, I'm still hoping for Sears to pull it out of the fire!

:D

[XISMZERO]

This is all sad news. In just a few short years, Kmart as it's been known for many years may be no more.

[Marc82]

I think SEARS should sell KMART rather than close it.

[dmx10101]

The problem with Kmart now is that they need somebody to run it that cares about the company. Lampert hasn't done anything since hr bought Kmart to better them. There's so many things they could do to make it a nice and competitive company if they got someone in there that cared about it.

[GothicPrincess]

Originally posted by dmx10101
The problem with Kmart now is that they need somebody to run it that cares about the company. Lampert hasn't done anything since hr bought Kmart to better them. There's so many things they could do to make it a nice and competitive company if they got someone in there that cared about it.

I got the solution. GIVE the stores to each of us in the towns that have them, and let US run them. We are the ones that appreciate retail. Then we can form them as K-marts into old stores we loved. Color schemes we grew up on, things like that. Then we run them as WE want. Like the Ames fans out there, the Caldor fans, Zayre...or even K-mart old-school if that's your personal favorite. I got dibs on Latrobe...hehe

[standa]

Originally posted by GothicPrincess

Originally posted by dmx10101
The problem with Kmart now is that they need somebody to run it that cares about the company. Lampert hasn't done anything since hr bought Kmart to better them. There's so many things they could do to make it a nice and competitive company if they got someone in there that cared about it.

I got the solution. GIVE the stores to each of us in the towns that have them, and let US run them. We are the ones that appreciate retail. Then we can form them as K-marts into old stores we loved. Color schemes we grew up on, things like that. Then we run them as WE want. Like the Ames fans out there, the Caldor fans, Zayre...or even K-mart old-school if that's your personal favorite. I got dibs on Latrobe...hehe

I saw the Latrobe KMart on live maps.  It looks like a nice store from the outside.  Was it always a KMart?  When did it open?  It reminded me a bit of a KMart Super Center.

[beachgal26]

I'll bet that no one else has thought of having the employees own the company such as Chrysler did back in the 80's.  It did work (at least for awhile until everything went to hell in the auto industry in the 90's and beyond) and could work again if the employees are as loyal to the company.

It makes me think if such a course of action could have saved Ames since I've never seen such a loyal bunch of former employees!  Who else would set up websites and still get together years after their company is gone!

:yup:

[GothicPrincess]

Originally posted by standa

Originally posted by GothicPrincess

Originally posted by dmx10101
The problem with Kmart now is that they need somebody to run it that cares about the company. Lampert hasn't done anything since hr bought Kmart to better them. There's so many things they could do to make it a nice and competitive company if they got someone in there that cared about it.

I got the solution. GIVE the stores to each of us in the towns that have them, and let US run them. We are the ones that appreciate retail. Then we can form them as K-marts into old stores we loved. Color schemes we grew up on, things like that. Then we run them as WE want. Like the Ames fans out there, the Caldor fans, Zayre...or even K-mart old-school if that's your personal favorite. I got dibs on Latrobe...hehe

I saw the Latrobe KMart on live maps.  It looks like a nice store from the outside.  Was it always a KMart?  When did it open?  It reminded me a bit of a KMart Super Center.

It's dirty on the inside. It was built about 25-30 years ago. Before that, it was in the plaza up the highway, where Tractor Supply is now. But the store went to heck obviously...it's a big store, but the inside is so cluttered and filthy, I feel like I'm in the thrift shop. They have those $5 gift bins with nail clipper sets and screwdriver sets, right smack in the middle of the aisle going from east to west sides of the store. The baby section is pitiful, rarely has in stock what is on the display. My grandbaby was just born and I had to fight to find the stroller I wanted without getting the display, which was dirty and stained, and not well-kept at all. If I had control, I would strip it down, fix the dirty tiles, and then re-do the whole store from bottom to top. It has center doors, and squeaky carts. There's a K-cafe in there, but I think it was changed to Nathans. I have to go back in there to double check, but I think that's what it is. I know they got dogs and such there. Good thing the cuz was here so I could get some info from her ;);)

[Zayre88]

Sears' 2Q profit drops 62 percent
12 hours ago

NEW YORK (AP) — Sears Holdings Corp. said second-quarter profit fell 62 percent drop as the retailer continues to struggle to attract customers to its stores despite a high-stakes restructuring. The company also said that it expects that its sales and gross profit margins will continue to be pressured as it sees no near-term improvement in the economy.

The Hoffman Estates, Ill.-based retailer, which operates Kmart and Sears, Roebuck and Co. stores, said Thursday that it earned $65 million, or 50 cents per share, in the three-month period ended Aug. 2. That compares with $173 million, or $1.15 per share, in the year-ago period.

The second-quarter 2008 results included the positive impact of the reversal of a $62 million reserve because of the overturning of a Feb. 2, 2007 adverse jury verdict related to the redemption of certain Sears, Roebuck and Co. bonds in 2004.

Excluding the item, earnings per share were 21 cents for the second quarter of 2008.

Revenue declined to $11.76 billion from $12.26 billion in the year-ago period. Same-store sales, or sales at stores opened at least a year, dropped 6.2 percent in the U.S. Same-store sales are considered a key indicator of a retailer's health.

http://ap.google.com/article/ALeqM5jbliHO_ecbJsSG5FgxMoEaUS9qUQD92R8E506

[dmx10101]

Originally posted by Zayre88

Sears' 2Q profit drops 62 percent
12 hours ago

NEW YORK (AP) — Sears Holdings Corp. said second-quarter profit fell 62 percent drop as the retailer continues to struggle to attract customers to its stores despite a high-stakes restructuring. The company also said that it expects that its sales and gross profit margins will continue to be pressured as it sees no near-term improvement in the economy.

The Hoffman Estates, Ill.-based retailer, which operates Kmart and Sears, Roebuck and Co. stores, said Thursday that it earned $65 million, or 50 cents per share, in the three-month period ended Aug. 2. That compares with $173 million, or $1.15 per share, in the year-ago period.

The second-quarter 2008 results included the positive impact of the reversal of a $62 million reserve because of the overturning of a Feb. 2, 2007 adverse jury verdict related to the redemption of certain Sears, Roebuck and Co. bonds in 2004.

Excluding the item, earnings per share were 21 cents for the second quarter of 2008.

Revenue declined to $11.76 billion from $12.26 billion in the year-ago period. Same-store sales, or sales at stores opened at least a year, dropped 6.2 percent in the U.S. Same-store sales are considered a key indicator of a retailer's health.

http://ap.google.com/article/ALeqM5jbliHO_ecbJsSG5FgxMoEaUS9qUQD92R8E506

Kmart actually was down slightly less than the Sears stores were..interesting.

[Toys4Joy]

Start taking all the pictures of Kmart you can.  Inside and out.  I have a feeling that pretty soon they are going to be gone for good.

[dmx10101]

Originally posted by Toys4Joy
Start taking all the pictures of Kmart you can.  Inside and out.  I have a feeling that pretty soon they are going to be gone for good.

I would disagree..

[Caldor1999]

Originally posted by dmx10101

Originally posted by Toys4Joy
Start taking all the pictures of Kmart you can.  Inside and out.  I have a feeling that pretty soon they are going to be gone for good.

I would disagree..

i woudent i mean lets face it kmart has gone down hill over the past 15 years and they never put in time to working on keeping there stores up to date i have 3 kmarts near me that were once caldors all kmart did was to a cheep paint job on the outside and reused some of the fixtures left over from caldor the one in white plains/greenburge was also a caldor became one of here new prodotype stores they added the new logo and gave it a paint job but they still did not chage the inside of it also the K Cafe makes the whole store smell really bad

[Zayre88]

Kmart may be casualty of Sears' dismal profits
2nd qtr. earnings off 62% for Hoffman Estates retailer

August 29, 2008

BY SANDRA GUY sguy@suntimes.com

After Sears Holdings Corp. reported Thursday a worse-than-expected 62 percent drop in fiscal second-quarter earnings, experts predicted Kmart's extinction and wondered how much longer the retailer will take to hire a CEO.

The Hoffman Estates-based retailer cut its full-year earnings forecast because the weak economy is keeping shoppers away from Sears and Kmart stores.

[i]"I see the company stumbling along without a new CEO and without a new vision,"[/i] said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York-based national retail consulting and investment banking firm.

A Sears spokesman said Thursday there was no update on a search to replace former CEO Aylwin Lewis, who left Feb. 2 after a disappointing holiday season, and there was no time frame for hiring a new leader. Chairman Edward S. Lampert chose W. Bruce Johnson to serve as interim CEO.

Several executives have departed in recent months, including Chief Marketing Officer Maureen McGuire, home services division head Mark Good, and Lands' End leader David McCreight.

Gary Balter, analyst at Credit Suisse, wrote in a note to investors, "Sears is in a secular decline," adding that comparable-store sales have been declining for more than three years.

Davidowitz repeated his earlier assertions that Kmart cannot survive fierce competition from faster-growing discounters.

"Kmart is finished," he said.

http://www.suntimes.com/business/1133929,CST-FIN-sears29.article

[/color]

[videogamer75]

The one thing I like about Kmart is that walking into one makes me feel like I timewarped back 2 decades, but that's not going to help them any. People just like to go to Target more because they tend to have better selection, more helpful employees, and a cleaner store/atmosphere.

[Caldor1999]

Originally posted by videogamer75
The one thing I like about Kmart is that walking into one makes me feel like I timewarped back 2 decades, but that's not going to help them any. People just like to go to Target more because they tend to have better selection, more helpful employees, and a cleaner store/atmosphere.

when i go inside this store i still feel like im in caldor

[Caldor1999]

same with this one as well they never chaged anything on the inside

[Caldor1999]

Originally posted by tbennett

Originally posted by Toys4Joy
Start taking all the pictures of Kmart you can.  Inside and out.  I have a feeling that pretty soon they are going to be gone for good.

I believe you're right.  I predict that Sears Holdings will see the holidays cannot help their bottom line, and liquidation sales will begin in January 2009, with liquidation sales at Sears stores beginning a couple days later.

I say this because every Kmart and Sears around here is always dead.  The Sears in Greenwood Park Mall in Greenwood, IN, is used more as a passageway to the food court than a place to shop.  Down the road, the Kmart never has any more than 6-8 cars in the parking lot at any given time.  Plus, the parking lot at the Kmart has enough large chuckholes to lose a school bus.

The Kmart Supercenter on US 40 in Indianapolis, IN, is the same way as the Greenwood one.  It was remodeled into a Kmart Supercenter in 1999 and has probably never been touched since.  It doesn't look like it.  There are never any customers in this store, either.

The Kmart in Martinsville, IN, was destroyed by a flood in June.  Corporate decided not to reopen this store.  It still had the old-school Kmart logo (it has since been removed) and opened in 1972.  It had the "BIG Kmart" logo hand-painted on the road sign, but I don't think the store itself actually received that renovation.

On another note, I wonder why NO Indiana Kmarts were chosen to be a part of the remodeling program?  God Himself knows all of the stores around here need it, ESPECIALLY Greenwood, which opened in 1974 and has been untouched since the "BIG Kmart" renovation!

The truth is, Kmart cannot compete with Target or Walmart.  Sears Holdings is really trying to revitalize the stores by remodeling them, but leaving 35-37-year-old stores untouched and unattractive to the average shopper will only push patronage further away from Kmart!

Tyler

and if you look at the pictures that i posted above of thoughs 2 kmarts you can see that they dont do much when it comes to rentvations and if you go in side the yourktown ny kmart you swere your shopping at caldor

[Caldor1999]

Originally posted by tbennett

Originally posted by Caldor1999

and if you look at the pictures that i posted above of thoughs 2 kmarts you can see that they dont do much when it comes to rentvations and if you go in side the yourktown ny kmart you swere your shopping at caldor

I also agree with you.

The Kmart that occupied the old Venture in Greenwood, IN, (closed August 2002...then got leveled by an F4 tornado in September 2002) never had any remodeling done.  I felt like I was back in a Venture when I walked into the store for the first time when it opened in early 2001.  Needless to say, with the round of closures in 2002, it didn't last long.

I've been thinking about how to revitalize Kmart for the past few days, and this may be the way to do it:

1. Put each store on a list to be remodeled, NOT just random stores in other states.  As I have previously stated, you can't leave stores looking old and dilapidated-looking and expect to return a profit because people won't shop there!

2. Once each store has been placed on a remodel list, target the stores that need the renovation the most.  Do more than just a cheap paint job  (If you make a store look too cheap, people still won't shop there.), target the inside of the store as well.  Strip down areas where ceiling tiles are sagging terribly, replace that horrible fluorescent/neon-looking yellow lighting, and install new fixtures where they are needed.

3. Hire some employees that actually WANT to help so people will actually WANT to come into the store.  I cannot emphasize how many times I have heard someone say they would not go back to a store because of a bad experience with customer service, including some stories about Kmart.  I work in customer service, and I know how crucial it is to a store's survival.

4. Have a grand-reopening celebration at all the stores with giveaways, sales, and drawings for big-ticket surprises.  Once again, you'd be surprised how many people you can attract into a store by giving away a 50-cent yo-yo or a bottle opener, for example.  People like free stuff, and they will come if you give them free stuff - a chance to show off the "new" store and a chance for that 50-cent yo-yo you gave away to become a $200 sale. :bigsmile:

I may not be CEO material by any means, but I believe if Kmart did something like this, it could bring life back into their brand and eliminate loss.  On that note, it would also give them a chance to better compete with Target and Walmart, possibly giving them a chance to take back the market. :roll:

Tyler

the one in white planes as u saw in that pic its the one with the new logo they did add a few new shevles but thats it it still has evreything caldor in it also they need to get rid of the K Cafe because it makes the whole store smell bad when caldor was there that use to be a nathans

[Zayre88]

These are good ideas.  Right now, Kmart is slowly scaling down, closing a store here and there after massive closings before 2005.  They pulled away from many markets and many remaining stores desperately need a real remodel.

Sears must come out with a clear concept and roll it out nationwide, get rig of various Big Kmart and other logos, they need to renovate and change lighting, ceiling and floor tiles as well as old fixtures at every Kmart.  They have to expand some stores and open new stores where other chains are thriving.

They are not aggressive enough. Meanwhile, Target, Kohl's and Wal-Mart have already expanded and opened hundreds of clean, bright, new stores.  

The way they are right now is not worth it.  Sears must choose between keeping an ailing diccount chain, turning it around now with major improvements or shutting Kmart down for good.

[videogamer75]

That Peoria, IL store is definitely a former Venture, and definitely a unique kmart....

[Caldor1999]

kmart really needs to just go its really hurting sears whitch is trying so hard to stay a float and i never really liked sears but i can tell there makeing progress while kmart just dosent seem to do that i really think its there time to go i mean even caldor bradlees ames ect ect were alot better then kmart thats why it was sad to see them go but i wouldent be so sad if kmart went

[powersbt]

First off, I would like to say that that Peoria store is really sharp looking. I'd like to see what the Interior looks like. My question is: How long will that Purple and Lime Green last before it starts to Fade, much like the Reds did in the Big K Signnage??

A million for a Logo change?? That's really not too much considering what the company has in assets.

Lastly, the big problem that I see with remodeling the Stores is the fact that there are a Large volume of stores, most of them needing an upgrade. I just do not see the company being able to justify going through Mass Renovations if they cannot gain enough  of an increase of sales as a result of store Renovations. Yeah, remodeling most if not all of the Stores sounds good on paper, but the Millions, most likely in the billions of dollars is a little hard to come by.

I really don't know what the answer is to it. I'd like to see them pull through though.