Kmart gets a new lease on life
Sears Holdings is putting in place a restructuring plan that aims to cut costs by $1 billion on an annualized basis and improve operating performance.
"We significantly improved our operating performance and made progress toward profitability in the fourth quarter of 2016. In the first several weeks of 2017, we undertook a series of transactions to optimize our capital structure and unlock value across our wide range of assets. We also reached an agreement to amend our asset-based credit facility, which further enhances our liquidity and financial flexibility,” said Edward S. Lampert, chairman and CEO of Sears Holdings.
Among the plans, Sears and Kmart corporate and support functions will be consolidated and data analytics will be used to optimize the product assortment at both Sears and Kmart.
And the company will continue to evaluate options, including partnerships and joint ventures, for the Kenmore and DieHard brands, as well as the Sears Home Services and Sears Auto Centers businesses.
"We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability. In addition, we believe these actions will enable us to focus our investments to drive our strategic transformation and the evolution of our Shop Your Way ecosystem through value enhancing partnerships, compelling offerings and a seamless online and in-store shopping experience for our members," Edward Lampert said.
For the fourth quarter, Sears now expects revenue of $6.1 billion. Net loss is expected to range between $535 million and $635 million, and same-store sales fell 10.3% (8% at Kmart).