SAY GOODBYE TO SEARS. “..faced with mounting liabilities, continues to be in a race to sell off assets..” By Todd Horwitz, Bubba Trading


Sears in Trouble

Sears Holdings on Thursday reported the smallest decline in quarterly same-store sales in more than three years, but its losses widened, as the embattled department store chain continues to trim its fleet of stores and aims to get back to profitability.

Sears, faced with mounting liabilities, continues to be in a race to sell off assets, cut costs and reduce debt, in a fight to keep the business afloat. Although same-store sales declines slowed during the latest period, they remain steep, illustrating the iconic retailer hasn’t won shoppers back. Heading into the holiday season, Sears’ options remain limited.

Sales at Sears and Kmart stores open for at least 12 months were down 3.9 percent during the second quarter, compared with a decline of 11.9 percent in the prior period. The 3.9 percent drop included a same-store sales decline of 3.7 percent at Kmart stores and a 4 percent decline at Sears stores. The company also said it saw positive comparable sales growth of 3 percent in July and 2.5 percent in August.

“I would say it’s unusual for any company, struggling or prospering, to not report when they said they were going to report,” said Robert Schulz, chief credit analyst overseeing retailers for Standard & Poor’s. Company officials again said they were making progress closing unprofitable stores as part of their efforts to turn the company around. They vowed the company could one day be profitable again.

“We have worked hard to make the best possible decisions for the company given the options available to it and the variety of constraints it has faced,” said CEO and primary shareholder Eddie Lampert. “We continue to believe that Sears can successfully evolve into a smaller but profitable company.” But even Lampert’s statement raised the possibility that the company might be forced to go out of business. He said Sears was looking for a way to remain “a going concern, rather than alternatives.”

Other experts said Sears’ recent track record meant that saving the company will require more drastic steps.

Todd “Bubba” Horwitz

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.