Anticipation of a permanent shift to online shopping has been behind Sears Holdings Corp.’s work on the technology front to enhance the platform for its member-centric Shop Your Way program, according to chairman and chief executive officer Edward S. Lampert.
This story first appeared in the February 28, 2014 issue of WWD. Subscribe Today.
“A long-term change in shopper habits has reduced our traffic perhaps permanently and shifted pricing power away from malls and big-box retailers,” he said on a prerecorded call prepared in connection with the company’s fourth-quarter results. “Instead, shoppers seem to be figuring out what they want online, then making targeted trips to pick it up from retailers that offer the best price.”
At Sears, the company has been focused on an integrated retail platform, one that enables members to shop anytime — whether in store, at home, online or on a mobile device — and fulfill their orders anywhere. Lampert noted how with a Shop Your Way mobile app, members can utilize a new in-vehicle pick-up service that allows them to pick up their online purchases “at any Sears store within five minutes of arrival without ever leaving their car.”
The comments came as the company reported a net loss of $358 million, or $3.37 a diluted share for the three months ended Feb. 1, below the loss of $489 million, or $4.61, a year ago. Revenues decreased 13.6 percent to $10.59 billion from $12.26 billion. Comparable-store sales fell 6.4 percent, reflecting a 5.1 percent decline at Kmart and a 7.8 percent drop at Sears’ domestic stores.
For the year, the loss extended to $1.37 billion, or $12.87 a share, from a loss of $930 million, or $8.78, in 2012. Revenues fell 9.2 percent to $36.19 billion from $39.85 billion.
Lampert on Thursday also posted his annual letter to shareholders, in which he said that if the “way the entire American retail industry ended 2013 is any indication, I believe 2014 may well be a year in which Sears Holdings begins to clearly demonstrate the advantages of this transformation….[N]ot only do I believe that we are headed in the right direction in important ways, I believe the entire retail industry is headed to where we already are.” For the first time, the company reported unaudited operating results for its Lands’ End business, which it’s contemplating spinning off to shareholders. For the quarter, net income rose 76.9 percent to $46 million. Sales fell 2.9 percent to $530 million. For the year, net income jumped 38.9 percent to $150 million, while sales inched down 1.5 percent to $1.56 billion.
Shares of Sears on Thursday rose 6.5 percent to close at $43.01 in Nasdaq trading.