Sears Holdings Corp. managed to cut first-quarter advertising and payroll expenses enough to reverse year-ago losses even though revenues declined 9.2 percent as both its Sears and Kmart apparel businesses suffered.
Net income for the Hoffman Estates, Ill.-based firm tallied $26 million, or 21 cents a diluted share, and compared with year-ago losses of $56 million, or 43 cents. Revenues fell to $10.6 billion from $11.07 billion for the quarter ended May 2.
Excluding a number of items, such as a 16-cent gain on the sale of Sears Canada’s former headquarters and a 20-cent charge attributable to pension expense, Sears had profits of 38 cents a diluted share, far higher than the 88-cent loss analysts projected.
Sears slashed selling, general and administrative expenses by $242 million, including a $107 million decline in advertising spending and an $84 million cut to payroll and benefits expense.
“In this challenging economic environment, we are pleased with the progress we have made in improving our gross margin rate, controlling inventories and further reducing our cost structure,” said W. Bruce Johnson, interim president and chief executive officer.
Comparable-store sales fell 11.7 percent at the Sears domestic division and 2.1 percent at Kmart. Apparel comps fell at both divisions. The gross margin rate rose 130 basis points to 28.6 percent of sales.
Sears also amended and extended its credit facility, providing $4.1 billion in financing through next March and $2.4 billion from March 2010 until June 2012. Sears’ original agreement had a borrowing capacity of $4 billion until March, but only $3.8 billion of that had been available since a Lehman Brothers affiliate backed out of the deal in September.
The results were released after the close of the market. Shares closed at $50.19, down 6.1 percent, but quickly advanced more than 20 percent in after-hours trading. Their 52-week high of $108.75 was reached on Sept. 19 and the corresponding low of $26.80 two months later, on Nov. 20.
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)
@Pharrell and his wife Helen Lasichanh were among the stars that came out to celebrate @rimowa’s first pop-up concept shop. The space, which is located on Rodeo Drive in Beverly Hills, draws inspiration from airport luggage carousels and lounge areas – and features the company’s luggage and accessories. If the pop-up is successful it could pave the way for addition temporary shops throughout the world. #wwdfashion (📷: Owen Kolasinski/BFA)
@carineroitfeld celebrated @crfashionbook’s first calendar last night with a dinner party at Spring Place in Manhattan. Photographed by @stevenkleinstudio, the calendar takes on a fitness theme and features @joansmalls, @gigihadid, @danielle_herrington_ – pictured here – and more. “[Carine Roitfeld] wanted me to feel sexy and she wanted me to be myself and feel it out on my own and do what I felt was right,” said Herrington, aka Miss October. #wwdeye
@saintrecords and @virgilabloh last night at @americanexpress’ “A Night With Success Makers” event. “I always bring it back to community because without that I wouldn’t have the courage,” said Knowles when asked how she has gotten where she is now. Read more highlights from their conversation on WWD.com. #wwdeye (📷: @lizdoupnik)
This Just In: Industry sources have told WWD that Anastasia Soare is rumored to be considering selling her beauty business, @anastasiabeverlyhills. According to those sources, Soare has tapped investment bank Imperial Capital to explore sale options for her eponymous beauty brand –– and with at least $340 million in net sales, this would be a big deal. Put in context of other recent transactions for makeup companies, Soare’s price tag could be in the billions if she were to sell the whole thing. #wwdnews #wwdbeauty (📷: @clint_spaulding)
@assouline’s latest book, “The Spirit of Bentley: Be Extraordinary” captures the adventurous attitudes and opulent lifestyles of @bentleymotors’ most creative owners and enthusiasts throughout the U.K. The 292-page hardcover has a section dedicated to showing its team of skilled artisans and photos of its most colorful owners, from George Bamford to designer @alicetemperley, pictured here by Aline Coquelle. #wwdeye
@google released its report on the most popular search terms this year. For fashion brands, the list was led by @gucci, the luxury brand that stunned the market last October when it pledged to stop using fur. Runner ups were @supremenewyork and @fashionnova, along with more established brands like @louisvuitton, @chanelofficial and @ysl. #wwdfashion (📷: @aitorrosasphoto)
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)