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Aug 24, 2017

Sears posts loss in second quarter on lower store traffic

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Struggling U.S. retailer Sears Holdings Corp (SHLD.O) reported a quarterly loss on Thursday as fewer customers visited its stores and as the company offered more discounts amid intense industry competition.

The retailer also said it would close 28 Kmart stores later this year, in addition to the 150 Sears and Kmart stores it plans to close by the end of its third quarter.

Sears said sales at stores open for at least a year fell 11.5 per cent in the second quarter ended July 29.

Total revenue fell 22 per cent to US$4.37 billion, mainly due to store closures, which shaved off US$770 million of revenue, the company said.

Once the largest U.S. retailer, Sears has struggled with years of losses and declining sales as shoppers shift from the mall to the web. In February, the company said it would cut at least US$1 billion in costs this year, mainly by monetizing its real estate.

Sears, controlled by billionaire investor Eddie Lampert, said it earned US$460 million in cash from real estate deals in the second quarter.

Net loss attributable to Sears narrowed to US$251 million, or US$2.34 per share in the second quarter ended July 29, from US$395 million or US$3.70 per share, a year earlier.

The company also said it had signed a deal with MetLife (MET.N) to reduce its pension liabilities.

The agreement will annuitize an additional $512 million of Sears' pension liabilities, with MetLife paying future pension benefits to about 20,000 retirees.