Updated! Like a slow-motion suicide, Sears started its new fiscal year by sinking deeper into the morass of losses, store closures and comp-sale declines.
Net loss widened to $424 million for the three months, ended May 5, compared with a year-ago profit of $245 million following the sale of its Craftsman tool brand.
Total revenues fell 31 percent to $2.9 billion and comps declined 11.9 percent, with Kmart contributing a 9.5 percent decrease and Sears showing a 13.4 percent decline.
With two-thirds of its $1.5 billion in revolving credit spent, the company is again turning to store closures to help stem the bleeding. Sixty-three out of 100 Sears and Kmart locations that were identified as “non-profitable” have been targeted for shuttering in early September, Sears said, with fire sales slated to begin this month. A list of the locations is available here.
Sears’ dire straits were also underscored by the urgency with which chairman/CEO and chief investor Eddie Lampert is pushing the retailer’s directors to approve the sale of Kenmore and other core assets to his ESL Investments hedge fund, possibly in partnership with others.
“Speed and certainty here are critical,” he wrote in a May 25 letter to the board, as the company’s liquidity continues to tighten.
See: Lampert Offers To Take Kenmore, Stores & Service Units Off Sears’ Hands
Sears said store closures contributed to nearly two-thirds of its sales decline in the first quarter, and attributed the wider loss to a tough year-ago comparison, when the retailer recorded a $492 million gain related to the 2017 sale of Craftsman tools to Stanley Black & Decker.