Sears Holdings Corp. (Hoffman Estates, Ill.) announced that sales fell 12 percent for the period ended Jan. 31, 2008, compared with a year ago. Sales at stores open at least a year, also known as same-store sales, dropped 8.3 percent. Sears domestic same-store sales declined 11 percent and Kmart same-store sales slipped 5 percent.
The retailer says these declines are driven by categories directly impacted by housing market conditions, including home appliances at Sears, and a slowdown in consumers' discretionary spending on apparel, home and household goods, and lawn and garden.
"Fiscal 2008 was a very difficult year for the U.S. economy, and its effect on consumer confidence reflects the turmoil that has enveloped the retail industry and our business,” says W. Bruce Johnson, Sears Holdings' interim ceo and president. “We maintained our focus on providing great product and service value to our customers, many of whom feel the impact of lower incomes and tighter credit.
During the fourth quarter, the company incurred $74 million of costs associated with store closings and severance, including $29 million related to the previously announced closure of eight stores and staff reductions. In January, Sears announced it would close an additional 24 underperforming stores.
"We continue to evaluate our business in an effort to provide financial flexibility in the near-term and believe these additional store closings, along with disciplined inventory and expense management, position us well as we enter 2009," says Johnson.