May 3, 2011 / 12:56 AM / 6 years ago

UPDATE 2-Sears Holdings forecasts first-quarter loss

* Sees Q1 net loss $1.35-$1.81 per share

* Board approves repurchase of up $500 mln more stock (Adds details, closing share price)

May 2 (Reuters) - Sears Holdings Corp (SHLD.O) forecast a loss for the first quarter, hurt by weakness at the retailer’s namesake and Kmart chains.

This comes about two months after Sears named former Avaya Inc [AVXX.UL] CEO Lou D‘Ambrosio as its CEO. He succeeds Bruce Johnson, who was interim CEO since 2008. [ID:nN23176648]

The company has seen sales fall every year since it was formed through the merger of Sears and Kmart. Billionaire investor Eddie Lampert formed the company by combining Kmart and Sears in 2005 and owns a controlling stake in the retailer.

The operator of Sears department stores and Kmart discount stores expects a first-quarter net loss of $1.35 and $1.81 per share as domestic same store sales fell 3.6 percent for that period with Sears Domestic down 5.2 percent.

The company said along with weak demand for its appliances, its apparel business experienced slow spring and summer sales because of bad weather.

Its namesake department store chain has been losing market share in appliances and apparel, while its Kmart discount unit is fighting a tough battle with Wal-Mart Stores Inc (WMT.N) and Target Corp (TGT.N).

Sears said it expects to report a comparable store sales decline of 9.2 percent at its Canadian unit for the quarter.

Sears said its board of directors approved repurchase of up to an additional $500 million of the company’s shares.

Shares of the Hoffman Estates, Illinois-based company’s shares closed at $84.18 on Monday on Nasdaq. (Reporting by Thyagaraju Adinarayan. Editing by Vyas Mohan and Robert MacMillan)

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