Is Sears Doomed?
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Yahoo Finance sees little hope for Sears. For years, the retailer has been closing stores and now it seems to be on its last leg. Declining sales caused the company to close 80 stores in July and another 64 through December.
CFO Jason Hollar remains optimistic:
We understand the concerns related to our operating performance. We have fallen short on our own timetable for achieving the profitability that we believe the company is capable of generating. With that said, the team remains fully committed to restoring profitability to our company and creating meaningful value.
This next sentence is a lesson in business jargon:
We believe that our liquidity needs will be satisfied through the foreseeable future using the levers available to us through our portfolio of assets.
In other words, they still have stuff to sell off (like brands) to keep the company afloat-perhaps not the best strategy. A failing company that sells its profitable bits is taking a big risk. The CEO of a retail consultancy doubts anything can save the business:
[T]he funds raised are not being used to develop of growth the firm - they are being used to prop up an ailing and failed business.
In our view, it is now too late to turn this around. It is just not financially feasible to reverse it.
How long can this drag on? BizCom in the News posts in 2011 and 2014 also focused on Sears store closings.
Discussion Starters:
- What are the Sears' executives communication choices at this point? They can continue to prop up the brand image, or . . . what are some other options? Assess the potential consequences of each
- Am I too harsh about Hollar's comment? If you were advising him to use simple or "plain" language, what would you suggest he say instead? You might consider a little emotional appeal as well.
- Hollar mentioned Kenmore as a potential sales opportunity. What's Sears without Kenmore?
