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Sears Reports Deeper Loss; CE Sales Lower

Hoffman Estates, Ill.
– Sears Holdings reported a deeper loss for its fiscal second quarter with lower
CE being blamed for decreases in comp-store sales.

The net loss was
$146 million, which was deeper than the $39 million loss in the prior year’s
second quarter. Revenues were $10.3 billion, down slightly from the prior
year’s $10.5 billion.

Sears Domestic
comp-store sales declined 1.2 percent, which would have been flat if CE sales
didn’t go down, the company reported. While Kmart’s comp-store sales received a
boost from its appliance business, CE, among other categories, was a drag on
that chain’s volume also.

Sears Holdings
said that beginning with the first quarter of 2011, it includes in comp-stores
sales online sales from and shipped directly to customers.
These online sales increased 32 percent over last year.

The operating loss
for Kmart during the second quarter was $16 million, compared with a profit of
$19 million in the prior year. The Sears Domestic loss for the quarter was up
$98 million, to $163 million, in the quarter.

Sales for Kmart
were $3.62 billion in the quarter, down slightly from the prior year’s $3.63
billion. At Sears Domestic, sales were $5.53 billion, down from $5.67 million
in the prior year’s second quarter.

During the quarter,
Sears Holdings closed 29 stores, which consisted of 10 Kmart stores, three full-line
stores, 12 Hardware and Appliance stores, two Sears Auto Centers and two The
Great Indoors stores. It converted 14 Sears Grand stores to Kmart stores; closed
seven product repair center locations; and, in addition to position reductions from
the above actions, reduced approximately 250 existing support positions.