Retail giant Sears is in big financial trouble.
February 24, 2012- Sears Holdings Corp announced a fourth quarter loss of $2.4 billion late Wednesday. The company also said it was planning a set of initiatives that includes plans to increase liquidity to help it recover from such dreadful sales the last 12 months.
Edward Lampert the Chairman said, “The poor 2011 financial results indicate clearly the need for a transformation of the company.” He added, “While some say the results are a trend, I say they are just an anomaly.”
Sears plans to break several of its business away from the core formats uses by Kmart and Sears. The idea is to allow each individual business to reach its out goals and have its own strategies to reach them. Sears plans to spin off companies that amount to 1,250 of its stores and sell a number of its stores. Sears announcement helped the stock soar 19% to close at $61.83.
Sears, in its quarterly report announced its fifth consecutive decline in revenue for a quarter, in a quarter that is generally thought of as the best for all retailers. It also announced that up to 120 stores would be closed. Its headquarters will also cut 100 employees in the coming weeks.
Critics say the initiatives buy the retailer time but do not guarantee success. Analysts says the steps are moving Sears in the right direction but the hole they are in will not be one that is easy to get out of.
