Sears to spin off some stores, reports loss

HOFFMAN ESTATES, Ill. - Sears Holdings (SHLD) says it will separate its smaller Hometown and Outlet stores as well as some hardware stores in a deal expected to raise $400 million to $500 million as it seeks to regain profitability and market share.

The operator of Sears and Kmart also says will sell 11 stores to General Growth Properties for $270 million.

The disclosures come as the Hoffman Estates, Ill.-based company says it swung to a loss in the fourth-quarter while revenue fell 4 percent to $12.48 billion. Adjusted earnings totaled 54 cents per share, below analyst expectations.

Led by billionaire investor Edward Lampert, Sears has suffered losses as consumers turn elsewhere. It has sought to improve results by cutting jobs and costs and closing underperforming stores.

[rwingliberal]

Sears was one of my first Credit Cards starting life with my wife. We liked the Kenmore products and were well on our way to being lifelong Sears customers. Then out of the blue they raised the rate on my Sears Card from like 6% to 19%. I had never been late and called and asked why. I had already accrued a nice little balance with buying Washer/Dryer and Fridge for our first home along with a few other things. They explained that since I had paid another CC company late (one F'n day late!!!) they were going to raise my rates. So I had to pay this crazy interest for a couple a months and was then able to pay the balance off. On the final Bill I wrote "Cancel My Credit Card Account Immediately" I have yet to step into another Sears store since that day 10 years ago.

[djseavy]

Their pricing isn't meant to compete, but their quality has fallen drastically. At one time Sears and Penneys went head-to-head, but that's ancient history. I agree that their stores haven't been updated in a long time. I have to wonder if they're selling Kmart quality at Sears, hoping to become profitable again. This is one case where you don't necessarily get what you pay for.

[bringbackmfg]

Sears appliances are from Whirlpool. The DieHard batteries are Interstate. I have found products with their brands to be overpriced compared to other places. Their lawn tractors are junk now. Most of their Craftsman tool line products are good but pricey. Lowes has the same quality tools for less. I have given them a lawn mower and a vacuum to fix but both times it cost more to fix than buying a new one. I used to like their AC and Heating maintenance service but they quit sending me specials so I stopped using them.

[Dreadnut]

Sears: AKA, the quickest and quietest entrance into the mall.

[jd2408]

I have first hand knowledge how that "spin off" works in the corporate world. Part of the business is separated and usually renamed as a stand alone company. The trick is, they saddle this new company with mountains of debt, that's really the spin off part. Shortly after the new company has to file bankruptcy because its buried in debt. Result, many people have lost their jobs and their 401k savings on their company "contribution" of company stock and the parent company has a lot less debt.
Works great.

[involved_indi]

The local paper this morning had announcements of two manufacturing plant closings affecting a few hundred jobs and with news like this about Sears on a national basis I guess all of the "Economy is getting better" hoopla of two weeks ago was just more political smoke & mirrors.

[actornaught]

And you stick your hand out the window to determine that there's no climate change.

[Resin-Smoker]

(Stands over Sears corpse) "Nothing to see here people, move along."

[twmat311]

I feel bad for the employees at our local store; they're going out of their way to be friendly, available to help (and knowledgeable), and greet you cheerfully coming and going. But the store is loaded with "60-75% off" signs - on grossly overpriced merchandise of average quality. Other than the Craftsman dept (the auto center has been a joke for years here), they've fallen a long way.

[saneObserver]

It's funny how retail always thinks the way to profitability is to get rid of people. I understand the predictment that they are in. They must compete with the internet on price, yet they are expected to be more. Unfortunately, there are 2 things that would send me to the internet instead of the brick and mortar store - a thrifted store with no selection & no one to help you and an over-inflated price. I guess retail is damned if they invest in stores and damned if they don't.

[Transatlantique]

Jim Cramer said this was "the next Berkshire Hathaway." What a laugh.

[twmat311]

Ever since the 2006-2008 period when he was so consistently wrong, he's lost all credibility. Too much circus, not enough smarts.