Sears loss widens to $548 million as sales slide continues

Hoffman Estates-based Sears Holdings Corp., the department- store chain controlled by hedge fund manager Edward Lampert, posted its 10th straight quarterly loss as sales continued to decline.

The third-quarter net loss widened to $548 million, or $5.15 a share, from $534 million, or $5.03 a share, a year earlier, the retailer said today in a statement. Revenue in the three months ended Nov. 1 slid 13 percent to $7.21 billion.

Lampert, the retailer's chairman, chief executive officer and largest shareholder, has been selling and spinning off assets to raise cash amid more than three years of losses and 31 straight quarterly sales declines. The plan to revive profitability entails shrinking the chain's store base while boosting sales online and through its shopper-loyalty program. Sears said last month that it may raise money by selling and then leasing back as many as 300 of its stores.

"It doesn't solve anything for them," Matt McGinley, an analyst at Evercore ISI in New York, said in a telephone interview before the results were released. "It just buys time."

Sears rose 0.9 percent to $34.25 yesterday in New York. The shares have slid 7.3 percent this year.

Sears will need about $4 billion in new capital to avoid running out of cash in 2016, Fitch Ratings said in a September report.

Sale-Leaseback

McGinley, whose firm recommends selling Sears shares, estimates that the retailer could bring in about $1.9 billion from the sale-leaseback transaction. He said he expects the company's cash consumption to accelerate next year.

Sears had $326 million in cash at its domestic operations as of Nov. 1, compared with $384 million a year earlier.

The quarterly sales decline was due in part to continued store closings and the spinoff the Lands' End clothing unit in April. Sales at stores open at least a year, considered a key gauge of performance, rose 0.5 percent at Kmart and declined 0.7 percent for domestic Sears stores.

Sears said last month that it would report a third-quarter net loss of $590 million to $630 million and unchanged comparable-store sales. The company has posted only one quarterly comparable-store sales gain since Lampert merged Sears Roebuck & Co. and Kmart Holdings Corp. in 2005.