SEARS’ CONTINUED REVENUE DECLINE SPARKS DEPARTURE OF CFO

Illinois-based department store chain Sears Holdings has reported another decline in sales for the first quarter of 2016. In a lengthy breakdown of the company’s financials, Sears Holdings also announced the departure of its CFO.

Revenues decreased approximately $488 million to $5.4 billion for the quarter ended April 30, 2016, compared to revenues of $5.9 billion for the quarter ended May 2, 2015. The decrease in revenue was primarily driven by a 6.1 percent decline in comparable store sales during the quarter, which accounted for $268 million of the revenue decline, and by having fewer Kmart and Sears Full-line stores in operation, which accounted for $149 million of the decline.

At Kmart, comparable store sales decreased 5.0 percent driven by declines in the consumer electronics, grocery & household, pharmacy, drugstore and home categories. Sears Domestic comparable store sales decreased 7.1 percent primarily driven by decreases in home appliances, apparel, consumer electronics, footwear and Sears Auto Centers.

“While our operating performance still remains well below our goals, I am pleased to report that our first quarter Adjusted EBITDA, excluding Seritage Growth Properties and joint venture rent, improved by $14 million compared to the first quarter of 2015, largely driven by reductions in overall expenses,” said Edward S. Lampert, Sears Holdings’ chairman and CEO. “Our Sears Domestic and Kmart apparel businesses continue to be negatively impacted by a heavily promotional competitive environment. We continue to focus on improving the overall performance of these businesses through changes to our assortment, sourcing, pricing and inventory management practices. We remain focused on restoring Sears Holdings to profitability by concentrating on our best stores, our best members and our best categories through innovative solutions leveraging our Shop Your Way membership program and our Integrated Retail offerings.”

In terms of growth strategies the company said that it recognizes the significant potential to further develop its Kenmore, Craftsman and DieHard brands as well as its Sears Home Services business. The company has retained Citigroup Global Markets and LionTree Advisors to assist in evaluating potential partnerships or other transactions that could expand distribution in these brands.

Finally, the company’s chief financial officer, Robert Schriesheim, will be departing from his position with Sears to focus on his other business interests and pursue other career opportunities. To ensure a smooth transition, Schriesheim has agreed to continue in his current role until we have identified his replacement. Additionally, Schriesheim will continue to remain an advisor to the company through January 31, 2017. “On behalf of Sears and its Board of Directors, I would like to thank Rob for his many contributions to the Company since he joined in 2011,” added Lampert.