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April 22
1974 - Gov. Ronald Reagan speaks at dedication of COC's first permanent building, the William G. Bonelli Instructional Resource Center [story]
Ronald Reagan


Sears Holding Corp., owner of the Sears and Kmart retail chains, posted fourth-quarter losses Thursday of $2.4 billion ($22.47 per share), and $3.1 billion ($29.15 ) for the full year ending Dec. 31.

Wall Street responded by driving Sears’ share prices more than 18 percent higher.

That’s because the retailer announced it will spin off more underperforming assets in addition to the 100 to 120 money-sucking stores it said it would close in December.

Slated for the corporate scrapheap are the company’s smaller Hometown and Outlet branded stores, as well as some hardware stores, to raise $400 million to $500 million.

It will also sell 11 other stores to a real estate investment firm for $270 million and cut inventory at its remaining stores by $580 million.

“We are taking immediate actions to address our fourth quarter performance including cost and inventory reductions, honed and targeted marketing, margin actions, and bringing in new talent to strengthen our merchandising and leadership team,” CEO Lou D’Ambrosio said in a statement.

Analysts weren’t sure what an infusion of cash would do for the company – which has a liquidity of $3.2 billion ($754 million and $2.5 billion of capacity on revolving lines of credit) but floundered through the December holiday season with same-store sales down 4.1 percent at Sears U.S. stores and down 2.7 at Kmart.

Chairman Edward Lampert said in a letter to shareholders Thursday that the company “has a profit problem, not a liquidity nor an asset problem.”

After adjusting for non-cash charges of $2.5 billion for the fourth quarter and $2.7 billion for the full year, Sears’ adjusted earnings were 54 cents per share for the quarter, ahead of expectations, and $4.52 for the year.

Sears added 15 stores Thursday, none in California, to its list of planned closures. The future of the Santa Clarita Valley’s Sears and Kmart outlets remains in question.

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