Sears Struggles Continue; Profit Falls 62%

[marmar]

via the NY Times:



Sears Struggles Continue; Profit Falls 62%

By THE ASSOCIATED PRESS
Published: August 28, 2008

The department store retailer, the Sears Holdings Corporation, reported a 62 percent drop in second-quarter profit as the company continued to struggle to attract customers to its stores despite a restructuring.

The company also delivered a downbeat outlook predicting that its sales and gross profit margins will continue to be pressured amid a challenging economic environment.

The retailer, which operates Kmart and Sears, Roebuck stores, said Thursday that it earned $65 million, or 50 cents a share, in the quarter ended Aug. 2. That compares with $173 million, or $1.15 per share, in the period a year ago.

The second-quarter 2008 results included the benefit of the reversal of a $62 million reserve because of the overturning of an adverse jury verdict in 2007 related to the redemption of certain Sears bonds in 2004.

Excluding the item, earnings were 21 cents a share for the second quarter.

Revenue declined to $11.76 billion from $12.26 billion in the period a year ago. Sales at stores opened at least a year, or same-store sales, dropped 6.2 percent in the United States. Same-store sales are considered a key indicator of a retailer’s health. .......(more)

The complete piece is at: http://www.nytimes.com/2008/08/29/business/29sears.html?_r=1&oref=slogin

[JeanGrey]

1. Why in the world did SEARS ever merge with Kmart? That was

STUPID. All Kmart stores around here are always empty. And there prices are way higher than Walmart. They never should've taken them and they need to dump Kmart. It might not help, because Sears stock was appliances, tools and now Best Buy, Circuit City, Brandsmart all compete in appliances. Sears is a goner I fear.

[mainegreen]

2. I doubt the fact that Sears has become synonymous with crappy service and ripoffs helped. n/t

[Romulox]

10. Crappy service compared to who? Best Buy? Kohl's? Target???

These are Sears' competitors. None are known for customer service.

[mainegreen]

14. Smaller local distributors.

Most areas still have smaller appliance only distributors and stores. Maytag stores are an example of this.
Around where I live there are a number of locally owned appliance stores, all who have seen upticks in business simply because of the phenomenally crappy service offered by sears and the like.

The thing with Sears is that they used to be good, and in the last 20 years have taken a major downturn.

[Romulox]

17. My local "Maytag Store" is located at the Home Depot. Another is at Best Buy...

Again, I wouldn't trust either of these stores to deliver a kitchen full of appliances.

[OwnedByFerrets]

3. Times change......companies who don't, fail......

its a new world out there and Sears has always been like a huge ship....slow to maneuver in new waters.

[KharmaTrain]

4. They've Been Dying A Slow Death For 20 Years...

I live not far from Sears corporate...a large complex that was all but given to the company (I still don't think they pay anything in state or local taxes) to keep them in the area. The "big boxes" have been in decline for the past decade as the Wal-Marts and strip malls have replaced the neighborhood department store. Combine that with the rise of online shopping that has cut into Sears catalog business and this company is on life support.

This 4th quarter is gonna be a ballbuster for the retail business. Last week I went into the local Best Buys...a place that last year was always crowded. The parking lot was nearly empty and no sooner did I walk in than I was hit up by several sales reps who appeared just glad to see a paying customer.

[marmar]

6. So true....I was in Macy's - customer-service challenged Macy's.....

and literally had the beat the sales people off me.

[KharmaTrain]

8. Macys Is A Dirty Word Around Here

They took over Marshall Field a couple years ago...got rid of the name and killed the biggest advantage they had in this area. Many of us paid higher prices for that green box as it was a family tradition. That's gone now, and so are a lot of the customers.

Corporate greed is coming home to roost...and my hopes are this may open the door for the return of smaller, local retailers. I refuse to go into any Wally World...or do any business with companies that exploit workers for "low prices". I gladly support blue and union businesses as I know that money is more likely to go to the people who do the real work, not their fat cat bosses.

Cheers...

:hi:

[marmar]

11. I know....but the Marshall Field's name took over Hudson's (a Michigan legend)....

.... several years before Macy's came, so Marshall Field's is kind of a dirty word around here, although not as dirty as Macy's. (Since Marshall Fields and Hudson's were essentially the same store anyway once Target Corp. bought them)

And I did notice on my recent trip to Chicago that traffic at the big Macy's (with the Marshall Field's placard outside) store on State Street was way, way lower than it used to be, even on a Saturday afternoon when it would usually be hopping.

[KharmaTrain]

16. A Sad "Legacy"

It used to be each city had its own unique store...Hudsons in Detroit, Kohls in Milwaukee, Gimbles in Philly and so on. Now it's all "one-size fits all"...the Wally World affect that undercut many of these once proud stores. Unions were busted, manufacturers and distributors were squeezed and the public given the bullshit of "always the lowest price"...but it came a a price we're all paying.

A couple weeks ago, I went past the Fields store on State Street (it will always be Fields to me...Macys is on 34th & Broadway in NYC), and the once beautiful windows were empty...a landmark "downsized" as the folks who used to take create those beautiful displays are gone...and with it a little piece of my childhood.

[Romulox]

18. The quality of goods at Marshall Fields was much inferior to Hudsons; they are not missed in Mich!

[Blue Diadem]

25. Yep, I left them in 1986. They made changes that I knew would do them in.

They were still the number 1 retailer when I left. The handwriting was on the wall though with the changes they made that put people in positions they weren't qualified for, took away quality customer service, froze base pay or took it away completely and sank the employee morale.

IIRC it was the next year, 1987, that K-Mart surpassed them. They've struggled since then.

[graywarrior]

5. Soon as I pay off my last 30 bucks to Sears I'm cutting my card in half

and mailing it back to them.

[LiberalEsto]

7. Why I stopped shopping at Sears

About 15 years ago I bought winter jackets at Sears for my two daughters. The girls put them on and went out to play in the snow. Within a half hour, almost all the buttons came off both jackets. I returned the jackets for a refund and bought new ones at another store.

Around the same time I bought some cartoon character twin sheets at Sears for one of my girls. After one or two washes, the sheets were so covered with "pills" that my daughter complained they were uncomfortable to sleep on. I returned those junky sheets too.

These two cases of lousy product quality convinced me to spend our hard-earned dollars elsewhere.

[Romulox]

9. Ditch the "softer side of Sears": clothes, candles, housewares. Keep appliances and tools.

Problem solved. Sears can't compete with clothing discounters, and other stores can't compete with Sears on tools and appliances.

PS: Anyone who buys a house full of appliances at Best Buy deserves everything they get.

[Hubert Flottz]

19. Sears's tools are nothing but over expensive junk anymore.

Sears auto centers got caught ripping folks, including myself, off years ago.

You can buy the same piss poor quality tools that are all made in China at places like Harbor Freight Tools for half the money that Sears charges for them and it's putting Sears out of the tool business. Greed Kills! I don't feel sorry for the selfish fools behind "Globalization".

I wore the last pair of work boots I bought at Sears(marked made in China)to work one day and I was crippled for a week. That was in 1989 and I haven't been back there since I returned those boots for a refund. BTW, those boots looked exactly like the ones I'd bought at Sears about ten years before that(Marked Made In USA)that were good comfortable boots and that lasted ten years on construction sites. The boots that were made in China cost about double what the old ones had cost. The only people who gained anything by shipping all the jobs overseas are the ones who are crying now because their stock ain't worth a shit.

How can the CEOs expect Americans keep buying, when all the jobs that paid enough to live on have been exported to the far east?

And don't EVER get trapped into a "Revolving Charge Account" at those places!

[Romulox]

20. I own Craftsman Screwdrivers, Lawnmower, Tool Chest, socket sets...all Made in USA.

I bought a 42 piece socket wrench set with metric, SAE, and Torx bits about 2 weeks ago. $99.00. Made in USA.

"You can buy the same piss poor quality tools that are all made in China at places like Harbor Freight Tools..."

No offense, but Harbor Freight sells trash. I wouldn't spend $99.00 on a socket wrench set at Harbor Freight, that's for damn sure.

[Hubert Flottz]

22. I bought all my tools from Sears years ago when they were made

in the USA...but when some did tear up and I returned them for exchange the replacements were cheap junk.

Lots of luck though.

[Romulox]

23. So you aren't going to admit you're wrong? LOL

"I bought all my tools from Sears years ago when they were made in the USA...but when some did tear up and I returned them for exchange the replacements were cheap junk."

I bought my socket set 2 weeks ago. It is Made in the USA. It is not junk (unlike the stuff at Harbor Freight.)

[Hubert Flottz]

24. I said I hadn't been back in a Sears store in years...

My wife went there a few years back and exchanged a Craftsman 25' tape for me and the new one was made of plastic instead of metal like the old one. Not very good if like me you use the tape around the welder and cutting torch.

Like I said Good luck and good-bye...

[Hubert Flottz]

12. When everything at Sears started to be made overseas I quit

shopping there.

I've never looked back.

They brought this on themselves.

[AngryAmish]

13. I know some people who work for Sears corporate

It is an utterly disfunctional company.

The folks who run the company are a bunch of financial types (a hedge fund owns them). They do not get retail.

The corporate structure are a bunch of older Sears lifers who fear the hedge fund guys. Nobody can make a decision.

There is a theory out there that the owners are just running it into the ground, squeezing every penny, then when real estate rebounds the land will be worth more than the company. Then they will sell Kenmore, Craftsman and a few other things in new buildings or just sell the brands.

[spinbaby]

15. Agreed, totally dysfunctional

I work for a company that sells, among other things, parts for legacy computer systems. Which is how I know that somewhere in the Sears corporation they're still using a TOKEN RING network.

[SoCalDem]

21. We have an ENORMOUS Sears store here

My husband has every tool that Sears ever made, so he loves the place..anyway..last weekend he went to Sears and said the place was almost empty, EXCEPT for Hispanic customers.. This tells me that their credit card customers are vanishing. Out here Hispanic customers usually pay cash..

I was once in line at the bank and this little elderly woman whipped out a HUGE wad of cash to open a CD account in her grandson's name.. The teller had to go get someone who spoke spanish, so they could tell her she needed HIM to come in with her, so he could sign the card.. She was ready to just leave with her cash, and they were worried about this little 80 lb Grandmother getting robbed, so they did finanlly get her to open a regular savings account, and then bring the grandson in later..

My friend who works there, said this is very common.. Hispanics & Asians often keep their money very "liquid", and refuse credit any time it's offered..

Stores like Sears cannot survive on cash-only customers..

We already had TWO large department stores in our mall fold up in the last 2 months..

[noonwitch]

26. I just hope that when they close KMart....

Target buys the contract for Queen Latifah's panty hose. They are the bomb, and the only reason I go to KMart anymore.

I worked at two different KMart stores in the 80s, and loved working there. It's not the same company anymore.

[Growler]

27. "...Too Incompetent To Even Take Your Money"

I thought this was an interesting article:

As background, I have an irrational loyalty to Sears. In the last 5 years I have spent probably over $20,000 on appliances, mattresses, and power tools there. I drive by 3 Home Depots to get to Sears; I want them to succeed for some bizarre reason. I don't even get it, haven't really even had great experiences, but nonetheless keep on going back. In May I tried to buy a lawn tractor, which is where the problem began....

http://consumerist.com/tag/Sears-death-watch/?i=5018891&t=sears-is-now-officially-too-incompetent-to-even-take-your-money