Free Newsletter
Hoffman Estates, Ill. – Sears Holdings’ forward-looking strategy is essentially a repeat of its past strategy: shrink its way to profitability by shedding or leasing out store space – even to vendors.
Eddie Lampert, the hedge fund manager who is the company’s chairman and chief stakeholder, announced in his quarterly review this morning that the future will be “asset-light.”
Key components include:
- Rolling 200-300 Sears and Kmart stores into a REIT. Officially in the exploration phase, the action is expected to take place in May or June and generate more than $2 billion.
- Reducing the company’s footprint in bricks by leasing out store space – either partially or in total, depending on the unit – to other retailers. Sears Holdings began the process last year and currently has lease agreements with Whole Foods, Nordstrom Rack, Dick’s Sporting Goods, Forever 21 and Primark.
- Leasing store space to key vendors who will create branded “experiences.”
- Focusing on growing its best and most important categories: home appliances, home services and apparel.
Sears Holdings “will attain considerable income” through leasing space, Lampert said in pre-recorded remarks.
In his annual letter to shareholders, he noted Sears has been written off as dead more than once in its history, only to rebound.
“Without the aggressive steps we have already taken to transform Sears Holdings from the predominantly brick-and-mortar retailer it once was to a best-in-class multi-channel integrated shopping experience for our members, we would be stuck on the same path that has claimed retailers like Circuit City, Borders, Radio Shack and others,” he added.
For the fourth quarter ended Jan. 31, Sears Holdings narrowed its loss attributable to shareholders to $159 million, or $1.50 per share, from a net loss of $358 million, or $3.37 per share in the year-ago quarter.
Total fourth quarter revenues dropped 23.5% to $8.10 billion. The company attributed $1.1 billion of that to the lowering of its stake in Sears Canada, $530 million to the Lands’ End spin-off, and $497 million that would have been generated by shuttered stores.
Consolidated comp fell 4.4%. Same-store sales declined 7% at Sears’ U.S. stores and 2% at Kmart.
Shop Your Way members accounted for 72% of sales at Sears full-line stores and 74% of sales at Kmart during the quarter.
For the fiscal year, net loss attributable to shareholders widened to $1.68 billion, or $15.82 per share, from $1.37 billion, or $12.87 per share, in the previous year. Revenues fell 14% to $31.2 billion.
