Sears is Going Down Like the Titanic
December 8, 2016 Leave a comment
Today, Sears reported huge losses, causing many analysts to speculate that the company will be liquidating all stores within the coming year or so. Sears is no stranger to losses; the store’s revenue has been falling for quite some time now. But after losing $748 million this last quarter, it looks like stakeholders are finally ready to call it quits.
“In our view, it is now too late to turn this around,” wrote Neil Saunders, CEO of retail consulting firm Conlumino. “It is just not financially feasible to reverse it.”
Saunders further compared Sears to the Titanic, saying that the company looks “set to sink.” But Saunders’ pessimistic outlook didn’t stop Sears Chief Financial Officer Jason Hollar from trying to reassure investors.
“We understand the concerns related to our operating performance,” Hollar stated in a prerecorded conference call. “We have fallen short on our own timetable for achieving the profitability that we believe the company is capable of generating. With that said, the team remains fully committed to restoring profitability to our company and creating meaningful value.”
The situation has gotten so bad that there are now widespread rumors that the company will go bankrupt. But according to Hollar, the company still has plenty of assets to draw from, meaning that they will keep stores running for at least a little while longer.
“We believe that our liquidity needs will be satisfied through the foreseeable future using the levers available to us through our portfolio of assets,” Hollar stated.
But there is at least a little hope at the end of the tunnel. According to Hollar, several companies have expressed interest in either purchasing or licensing Sears’ in-house brands. Kenmore, Craftsman, and DieHard are just some of the brands that investors are looking into.
Sears also owns Kmart, which is rumored to be closing its doors as well. But despite widespread accusations, Sears CEO Edward Lampert said that, “there have never been any plans to close the Kmart format.”