Dive Brief:

• Sears Holdings Corp. on Thursday reported its 20th straight quarterly sales and revenue miss, and announced it will accelerate the closing of unprofitable stores to combat declines.

• Q3 same-store sales fell 7.4%, the weakest results so far this year, with Sears same-store sales falling 10% and Kmart same-store sales falling 4.4%; the result missed analyst expectations for a 5.3% decline. 

• Third quarter revenue fell 12.5% to $5.03 billion, (compared to its $5.75 billion loss in the same period last year), and Q3 adjusted losses were $3.11 per share, wider than the $2.98 per share loss a year ago. A Thomson Reuters estimate from one analyst had estimated a loss of $4.06 per share on $4.95 billion in revenue. 

Dive Insight:

In a prerecorded conference call, Sears CFO Jason Hollar said the company plans to sell off its Kenmore, Craftsman and DieHard brands and its Home Services business and reduce the investment in underperforming merchandise categories. Hollar insisted the retailer’s resources, which include real estate, investments from CEO Eddie Lampert’s hedge fund and the potential sale of key brands and businesses, will help the company realize its strategic goals.

"We continue to believe that the opportunity to perform better is right in front of us, but we have to convert that belief to reality," Hollar said. "The retail environment has continued to be challenging for many traditional retail companies but we will not use that as an excuse. We need to perform better and we are taking actions, large and small, to achieve better performance."

But to Neil Saunders, CEO of retail research agency and consulting firm Conlumino, Sears is like the Titanic.

“While Sears was once a titan of U.S. retail, it now looks set to sink,” Saunders wrote in an email to Retail Dive. “We do not make these claims lightly, but only on the back of the evidence available. First, the top line has been in decline for as long as anyone can remember. Comparable sales have been on the slide for just over 11 years. This quarter shows no sign of even the mildest of improvements."

Saunders also notes that while Sears executives continue to maintain they are committed to restoring the group to profitability, "there is no evidence to suggest this is happening," adding "In order to fund these losses Sears is monetizing its assets — in other words it is selling off chunks of the business to fund day-to-day operations … The problem with this approach is that the funds raised are not being used to develop or grow the firm, they are being used to prop up an ailing and failed business.”

Finally, Sears' turnaround strategy is “severely lacking,” Saunders said​. "Quite simply they are badly run, badly managed and they are places that shoppers are abandoning in ever greater numbers. In our view, it is now too late to turn this around. The rot has well and truly set in and it is just not financially feasible to reverse it.”

While many analysts have predicted the end of Sears for some time, Debtwire retail analyst Philip Emma told Retail Dive Wednesday that its rich assets could help keep it afloat for quite a while, but that doesn’t mean it will regain its footing. 

“I mean, sure, there’s always a chance, but why assume the status quo will change until it does change. Absolutely they’re an asset rich company … but inevitably, any retailer has to make money as a retailer,” Emma said. He compared the situation to that of grocery chain A&P years ago, where “over the course of two decades of deterioration, you have resources, and eventually you run out of that.”

As Sears continues to close stores, Saunders said many malls will be faced with hardship, unless they can replace those locations with better performing retailers. Rivals like J.C. Penney, which is already taking market share from Sears in appliances, could continue to benefit from Sears' woes.

While the recent exit of several executives from Sears has caused some to speculate that bankruptcy is imminent, the timing is hard to assess, Saunders said. “[I]n our view [Sears] is now firmly on a trajectory to failure. Sears may dispute this, just as in 'Titanic,' Mr. Ismay protested that ‘this ship can’t sink.’ But as Mr Andrews firmly reminded him: ‘I assure you, she can. And she will. It is a mathematical certainty.’”