Sears Holdings struggles amid transition
Cecile Corral -- Home Textiles Today, August 22, 2013
Hoffman Estates, Ill. - Sears Holdings' efforts to shift to a member-centric retail format succeeded in generating a strong proportion of sales from Shop Your Way members, but overall revenues fell and the company's net loss widened.
Sales for the quarter ended July 28 fell 6.3% to $8.9 billion, the result of having fewer Sears U.S. and Kmart stores in operation as well as the spin-off of Sears Hometown and Outlet Stores, the company said. Shop Your Way members accounted for more than 65% of sales and redeemed rewards points at a significantly higher rate than last year.
"While the increase in Shop Your Way promotional activity and member redemptions resulted in a meaningful increase in our costs, it demonstrates that our members are deepening their engagement with our program, which will allow us to further accelerate our transformation," said Eddie Lampert, Sears Holdings' chairman and ceo. "At the same time, we recognize how important it is to improve the profitability of our company and I am disappointed that we did not deliver a better result."
For the quarter, toal U.S. comps fell 1.5%, comprised of decreases of 2.1% at Kmart and 0.8% at Sears Domestic
Net loss was $194 million compared to a net loss of $132 million in the year-ago quarter. Gross margin rate decreased 210 basis points during the period.
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