It’s another sign of just how well the economy is doing under the presidency of Barack Obama: Sears, the retail giant that has been an American icon since time immemorial, is rumored to face bankruptcy following yet another disappointing quarter.
According to Business Insider, Sears reported huge losses on Thursday, with the company saying that its recovery has “fallen short” of its goal.
In addition, a report from AOL stated that top executives were fleeing the company like a sinking ship, with two top execs having left in the last month alone.
Sears’ revenue fell 12.5 percent to $5 billion and same-store sales dropped 7.4 percent, including a 10 percent drop at the flagship Sears stores. Kmart stores, also owned by Sears, reported a 4.4. percent drop.
Losses were $748 million in the third quarter, way up from $454 million last year.
“We understand the concerns related to our operating performance,” Jason Hollar, Sears’ chief financial officer, told reporters during a pre-recorded 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.”
Sears says it will expedite store closures to remain competitive, after having already shuttered 64 Kmart stores this month.
In the last month, Sears executive vice president Jeff Balagna left the company “in order to focus on his other business interests and pursue other career opportunities.” Sears President and Chief Member Officer Joelle Maher left earlier. Such departures just before an earnings report and during the holiday shopping season was called “highly unusual” by one analyst.
Neil Saunders, who heads retail consultancy firm Conlumino, likened the once-indomitable chain to the Titanic and said that it looked to be “about to sink.”
“In the movie ‘Titanic,’ there is a line where, realizing chaos is about to ensue, one character helpfully notes, ‘It’s starting to fall apart. We don’t have much time,’” Saunders told CNBC. “Such a sentiment could well be applied to Sears. The analogy with ‘Titanic’ is also apt; not least because while Sears was once a titan of U.S. retail, it now looks set to sink.”
Back in September, Business Insider also reported that credit analysts Moody’s was predicting bankruptcy for the chain, saying that “Sears and Kmart don’t have enough money — or access to money — to stay in business.”
We’ve seen similar problems elsewhere in the retail sphere, as Sears’ competitor Macy’s has also suffered major losses. In August, the retail chain announced it would be closing 100 of its stores.
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