Boston, MA 05/27/2014 (wallstreetpr) – Sears Holdings Corp (NASDAQ:SHLD)’s efforts to lure buyers with huge discounts falls flat as the retailer posts higher losses in the first quarter.
The retail company is struggling to attract more sales and had announced heavy discounts in its efforts. However, the results of the first quarter show that its efforts failed to pay off as sales continues to decline. As a result, the company’s shares operating Sears’s department outlets and the Kmart discount stores declined 4% in premarket trading.
Losing Out To Rivals
The poor sales are a direct consequence of not only unattractive products, but also the ill organization of the stores. According to analysts, this has caused shoppers to abandon the stores of Kmart and Sears and approach rivals including Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT). Regarding consumer experience at the stores of Sears and Kmart, the Chief Executive Officer of Belus Capital Advisors, Brian Sozzi commented that it is “horrific”.
Sears was at a time the biggest retailer in the U.S. by terms of revenue, but Wal-Mart had surpassed it in 1990. It is now adopting the strategy of convincing customers to buy memberships to earn revenue. Its program, “Shop Your Way”, allows consumers to shop online as well. Sales to members had also been reported to surge from 68% to as much as 74% last year.
Selling Off Assets
Sears Holdings Corp (NASDAQ:SHLD) is leveraged by hedge fund billionaire Eddie Lampert and has been selling assets to counter the huge losses in its operations. The company is also shutting more and more stores to make up for the poor sales and losses it has been incurring since 2005. That year had recorded the merger of the two chains.
Last week, Sears announced sale of 51% stake in Sears Canada Inc (TSE:SCC), which is expected to fetch the company almost $730 million cash as per the present market value.
