Sears slides after big investor plans to leave board
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Shares of Sears Holdings slipped 11.5 percent Monday after the company’s biggest outside shareholder announced he’s leaving the board.
Bruce Berkowitz is leaving the board Oct. 31, the company announced Monday. He joined the board in February 2016.
Berkowitz is the chief investment officer of Fairholme Capital Management LLC. Berkowitz owned more than 27 million shares of Sears, or about a quarter of its outstanding shares, as of Oct. 12, making him the company’s largest outside investor, according to Bloomberg. He first reported a stake in the retail company in 2005.
The Hoffman Estates-based retailer, which operates Sears and Kmart stores, has been trying to cut costs by closing stores. It also has licensed some of its best-known brand names such as Kenmore and DieHard.
In the second quarter, the company’s revenue fell 23 percent to $4.37 billion. Sales at stores open at least a year, a key measure of a retailer’s health, dropped 11.5 percent.
In March, Sears said there was “substantial doubt” it could continue as a viable concern, with intense pressure coming from companies like Wal-Mart, Target and Amazon.com. It has insisted that its actions to turn around its business should help reduce that risk.
The company said Thursday that it has used about $605 million of its $1.5 billion revolving credit facility due in 2020. Its cash balances were $442 million as of July 29.
Sears Holdings shares closed at $5.99, down 78 cents or 11.5 percent, on the NASDAQ. Shares traded as low as $5.75 during the session Monday. The company’s 52-week low is $5.50 a share.
Contributing: The Associated Press