March 22, 2017

Sears in deep trouble

Reuters - Sears Holdings Corp, once the largest U.S. retailer, warned about its ability to continue as a going concern after years of losses and declining sales.

"Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern," Sears said in its annual report for the fiscal year ended Jan. 28.

The company said an inability to generate additional liquidity might limit its access to new merchandise or its ability to procure services. Continued operating losses also could restrict access to new funds under its domestic credit agreement, according to the filing.

Sears shares were down 17.6 percent in premarket trading on Wednesday.

The company is also considering selling some of its businesses, such as the Kenmore appliances and DieHard car battery brands.

The Sears catalog was an emblem of the post-World War II consumer boom in the United States but the company was unable to adjust to the changing retail landscape and rising competition from Wal-Mart Stores, Target Corp and others.


Anonymous said...

The myopic business strategy of maximizing short term returns at the cost of company staff, infrastructure, and longevity is finally reaching its predictable end. Sears has been gutted from within. Staff had been reduced to absurd levels. Sales force near wholly dependent upon commissions. Customer service near non-existent. The list goes on and on. Sears' problem wasn't external competition, it problem is the logical result of a flawed, but all too common, business ethos. Sell the crappiest product, at the highest possible price, with the least amount of product support or accountability.

Argon said...

All of the major big box retailers are in for continued economic shocks and downsizing as the business model based on a shrinking middle-class and lower-middle class continues to suffer income instability from the economic redistribution upwards by the parasitic wealthy. As the populations discretionary budgets dwindle so too will every sector of the economy that isn't non-discretionary. This is of course also the bases of "pay or suffer and die" healthcare which seeks to appropriate the entire income of the lower classes.