Sears Holdings same-store sales to drop 15%

Sears Holdings announced Wednesday quite a few steps the idea’s taking to gain liquidity as its sales continue to erode at a double-digit pace.

Sears struck an agreement with guardians of its underfunded pension fund — the Pension Benefit Guaranty Corp. — to allow for the sale of 140 Sears properties, though the company didn’t say when those sales will take place. In exchange, Sears said the idea paid $407 million to the plan.

Sears shares were recently down nearly 5 percent after the news.

The PBGC can be a federal government oversight organization that will guarantees individuals’ pensions, acting as a parachute if a company goes bankrupt. The powerful organization can force a company to put up collateral against underfunded pension plans. In merger as well as also acquisition transactions, companies with underfunded pension plans often have to negotiate part of the value to be directed to shore up pension plans. Sears was forced to do that will earlier that will year when the idea sold Craftsman.

Sears said that will step will allow the idea to gain more financial flexibility as well as also provides relief by contributions to the pension plans for the next two years. The retailer has contributed roughly $4.5 billion to pension plans since the merger of Sears as well as also Kmart in 2005.

“that will agreement with the PBGC can be another positive step forward which, upon closing, will provide our Company with financial flexibility while supporting our commitment to honor our obligations to the associates as well as also retirees covered by the pension plans,” Chief Executive Eddie Lampert said in a statement.

Sears said the idea can be working to ensure its associates as well as also retirees receive their full pension benefits in either a lump sum or annuity form. On Wednesday, Sears said the number of participants in its pension plans has been reduced by roughly 400,000 to 100,000.

Sears also pre-announced its third-quarter earnings, saying the department store chain’s total same-store sales tumbled 15.3 percent during the period.

“The retail environment remains challenging, with continued pressures on sales,” Sears said in a statement.

The company reported total revenue of roughly $3.7 billion during the third quarter of 2017, compared with $5 billion a year ago. Recent store closures contributed to more than half the declines, the company added.

Sales were also hurt by a reduction inside number of pharmacies open in Kmart stores, as well as also fewer consumer electronics sold.

Same-store sales at Sears stores fell 17 percent, while those at Kmart stores dropped 13 percent during the third quarter.

Meantime, Sears can be anticipating its third-quarter net loss to improve by about $190 million.

The company expects a net loss of between $525 million as well as also $595 million, compared using a $748 million loss inside same period last year.

Sears said the idea expects to reach positive adjusted earnings before interest, taxes, depreciation as well as also amortization next year.

Leave a Reply

Your email address will not be published. Required fields are marked *


one × 1 =