Bad news for Sears Holdings — the parent company of Sears and Kmart lost $56 million in the first quarter, and some experts are saying that boss Eddie Lampert may have to face up to the fact that Kmart needs to close.
From the AP:
Howard Davidowitz, chairman of retail consulting firm Davidowitz & Associates, said he thinks Lampert will need to dramatically realign business units — and even consider shutting down the discount Kmart brand — if the retailer has any hope of remaining viable to the American consumer.
“It’s going to get a lot worse,” he said. “Given these results, I think Lampert really has to now face up to major, major store closings.”
Sears is in the midst of a high-stakes restructuring aimed at reconnecting with customers and reinvigorating atrophied same-store sales, which have fallen for the past nine consecutive quarters. The company is also searching for a new CEO.
The company said its troubles were due to the soaring cost of gas and food leaving less money for would-be customers to spend at Sears and Kmart. It seems that these customers are also defecting to warehouse stores and buying in bulk: Costco isn’t having any problems — their profits are up 32%.
(Photo: Joseph Hoetzl )