Sears CEO sees room to close more stores
By Dhanya Skariachan
NEW YORK (Reuters) - U.S. retailer Sears Holdings Corp (SHLD.O: Quote), which has been struggling to generate cash from its operations, sees room to close more stores next year, Chief Executive Edward Lampert said on Thursday.
The operator of Sears department stores and the Kmart discount chain has closed about 300 U.S. stores since 2010, tightly managing inventory, selling real estate and shedding assets at home and in Canada as it tries to engineer a turnaround after years of declining sales.
"We need to make the difficult choice" in some cases when the stores are unprofitable and as more shopping moves online, Lampert said in an interview. He declined to specify the number of closings next year.
The comments by the billionaire hedge fund manager, who is also Sears' chairman and largest shareholder, helped to reduce the stock's decline to 2.2 percent on Thursday. It has risen 49 percent year to date.
The company has about 2,000 Sears and Kmart locations in the United States. Most of the stores closed since 2010 had leases that expired.
Earlier on Thursday, Sears reported a wider quarterly net loss on tepid sales at both chains and margin weakness due to more promotions targeting rewards members. Still, Lampert said focusing on that segment was essential to Sears' success.
"You may sell more or less products, but you know if John Smith and Mary Smith are visiting with us more, if they are buying more, if they are buying in more categories, if they are earning points and using those points," Lampert said. "That's something to really build on."
Lampert, who has often been criticized for not investing enough in stores and for relying on financial engineering to boost profits, said Sears was spending more to make targeted offers to members of its "Shop Your Way" rewards program. Continued...