Sears cuts headquarters staff after dismal quarter

SHARE Sears cuts headquarters staff after dismal quarter

FILE - A May 4, 2011, file photo shows the entrance to the Sears Holdings Corp. in Hoffman Estates, Ill. Sears Holdings Corp. (SHLD) reports earnings on Thursday, Feb. 25, 2016. (Mark Welsh/Daily Herald, via AP File) MANDATORY CREDIT; MAGS OUT, TV OUT

The struggling parent of Sears and Kmart stores laid off 250 people Thursday after another dismal financial report.

The cuts by Sears Holdings included 200 people at the company’s Hoffman Estates headquarters. In addition, 151 jobs open in Hoffman Estates will not be filled. Full-time employees who were laid off will receive severance.

“These decisions are never taken lightly, but they are a necessary step to return the company to profitability,” spokesman Howard Riefs said.

The layoffs will affect a mix of business units across the company, Riefs said.

Earlier Thursday, Sears said its fourth-quarter loss widened despite deep cost cuts and, after the struggling retailer limped through the crucial holiday shopping season, it promised to tighten spending even more this year.

Chairman and CEO Edward Lampert pointed to a warm winter that drove down sales for seasonal goods and brutal competition with other retailers, almost all of whom were forced into clear inventory by marking down prices drastically.

The company announced a major shareholder will take a seat on the board, which will be increased to 10 seats.

One of those seats will be occupied by Bruce Berkowitz, chief investment officer at Fairholme Capital Management LLC.

Fairholme owns a 26.3 percent stake in the Hoffman Estates company, according to the data firm FactSet.

For the period ended Jan. 30, Sears, which also owns Kmart, lost $580 million, or $5.44 per share, compared with a loss of $159 million, or $1.50 per share, a year earlier.

If a one-time $180 million charge related to the impairment of the Sears trade name is removed, the per-share loss would have been $1.70 per share.

Revenue declined to $7.3 billion from $8.1 billion.

Sales at Kmart stores open at least a year dropped 7.2 percent, while sales at Sears stores fell 6.9 percent. Both were hit with weak consumer electronics sales, though the company said that that was actually an improvement from the first three quarters of the year.

Sears said earlier this month that it would accelerate the shuttering of some stores following the challenging holiday season.

The company for years has been searching for ways to compete with the Home Depots and Wal-Marts down the street, and with online.

Sears stores in many locations appear run down and it has tried to revitalize its image, but it’s doing so in an environment in which it must reduce costs to mitigate its losses.

The company lowered expenses by about $150 million in the fourth quarter and estimates that it will further cut costs by $550 million to $650 million this year.

At the same time, it is promising to shake up sourcing, pricing and inventory to reinvigorate clothing sales.

Sears Holdings Corp. reported a full-year loss of $10.59 per share on revenue of $25.15 billion.

Contributing: Bill Ruminski/Sun-Times

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