Sears Holdings will “explore alternatives” for its home services unit and private-label Kenmore, Craftsman and DieHard brands amid steepening first-quarter losses and the departure of its chief financial officer.
The retailer, which has divested its Land’s End, Hometown and Outlet Stores and Canadian divisions, and is now tapping its real estate to raise cash, has long tried to leverage its in-house brand portfolio, most recently hiring a global licensing agent to find new opportunities for the Sears badges.
But with this latest core asset move, majority shareholder and chairman/CEO Eddie Lampert may in fact be “burning the furniture to heat the house,” as Credit Suisse analyst Gary Balter once famously forecast.
This time, the chain has retained two investment banks — Citigroup Global Markets and LionTree Advisors — to help develop “potential partnerships or other transactions” that would expand the retailer’s brands and services outside of Sears and Kmart.
“As the ‘Internet of Things’ develops and as more of our lives become connected, we believe Sears Home Services and Kenmore, Craftsmen and DieHard stand to benefit significantly from broader accessibility,” the company said in statement.
They’d better move quickly. Kenmore, Sears’ private-label appliance brand, once ruled the white-goods roost, boasting a 27 percent market share as recently as 2004. But that lead has since fallen by more than half, to an estimated 12.5 percent this year, dropping it to fifth place among the top majap brands.
News of the strategic decision accompanied another dismal earnings announcement. Net loss for the three months, ended April 30, was $471 million, compared with a year-ago net loss of $303 million, and net sales slipped 8.3 percent to $5.4 billion on comp-sale declines and 94 store closures.
Broken out by chain, comps at Kmart fell 5 percent chiefly on declines in consumer electronics, while Sears’ comps dropped 7.1 percent on declines in its core appliance business, as well as apparel and CE.
The icing on the quarterly cake was the announced departure of chief financial officer Robert Schriesheim after five years at Sears. Schriesheim, previously chief financial officer of Hewitt Associates, a global human resources outsourcing and consulting firm, will remain with Sears until a successor is named.