Sears CFO to depart as company explores options for key brands

Dive Brief:

Sears Holdings Thursday announced two big pieces of news while releasing its first quarter earnings. The retailer's sales fell 8.3% to $5.39 billion in the quarter, while revenue fell $488 million to $5.4 billion. Same-store sales decreased 6.1% company-wide; Kmart same-store sales fell 5% and Sears U.S. same-store store sales fell 7.1%.
The company announced that Sears CFO Robert Schriesheim will be departing “to focus on his other business interests and pursue other career opportunities.” Schriesheim will remain until his replacement is found, the company said, and will be available as an adviser through January.
Sears also said it has retained Citigroup Global Markets and LionTree Advisors to explore ways to develop its Kenmore, Craftsman and DieHard and Sears Home Services businesses, which have remained strong suits even as the company has stumbled.

Dive Insight:

Sears Holdings CEO and chairman Edward S. Lampert said that Kmart and Sears continue to struggle in a “heavily promotional competitive environment,” an environment that seems to be affecting many retailers this year. J.C. Penney, Nordstrom, and Macy's all reported less-than-stellar sales in the first quarter last week as customers remain fickle with their spending and traffic to malls decreases.

Lampert also detailed ways the company plans to combat these woes, which includes zeroing in on its Shop Your Way membership program and its high-performing stores. The retailer has been focusing on aggressively cutting costs with store closings and layoffs announced in April, which includes 68 Kmart stores and 10 Sears stores.

“We continue to focus on improving the overall performance of these businesses through changes to our assortment, sourcing, pricing and inventory management practices,” Lampert said in a statement.

Lampert also said the company will “aggressively evaluate all of the potential alternatives available to” its Kenmore, Craftsman and DieHard and Sears Home Services businesses, a move that many observers have suggested for years. Sears’s Craftsman and Kenmore brands in particular still outpace many other comparable brands in name recognition and consumer trust, and could survive nicely outside of the Sears brand itself. The retailer currently sells those brands and its auto batteries through other retailers, but has apparently realized that it could leverage those strengths further.

Schriesheim also took note of the company’s significant real estate assets in a press release, which were morphed into a REIT and have helped keep things afloat. He said the company will “continue to take actions” to adjust its capital structure to help in its elusive turnaround and meet its obligations. Schriesheim has been with the company since 2011, with the Wall Street Journal calling him a "key lieutenant" to Lampert as he navigated the retailer's turnaround.