Sears Holdings Corp.’s stock dropped to new depths Monday with the retailer’s own money woes melding with a general retreat on Wall Street, where President Trump’s controversial moves to curb immigration from certain Muslim nations spurred uncertainty.
Sears’ stock fell as much as 14.3 percent in midday trading, but ended off 7.6 percent to $6.86, having already lost 20.5 percent of its value last week amid bearish reports from credit watchdogs and continuing store closures.
A Sears spokesman declined to comment on the decline.
The retailer, run by hedge fund guru and chief executive officer Edward S. Lampert, now has a market capitalization of only $734 million — a pittance given its $23.4 billion in revenues for the last four quarters.
Lampert built the modern Sears by combining it with Kmart in a 2005 deal, but losses have piled up and observers have long complained the company under-invested in its stores, choking off its main business as it sought to build a membership sales platform.
Last week, debt firm Fitch Ratings projected Sears would burn through $1.6 billion in cash in 2016 and $1.8 billion in 2017. Fitch expects Sears’ comparable-store sales to fall 8 percent for 2016 and trend down in the mid- to high-single-digit range for 2017.
Lampert has repeatedly loaned money to the retailer and sold off real estate, Lands’ End and other assets to keep it afloat. But now he’s starting to run out of assets.
CBL & Associates Properties Inc. said Monday it closed a $72.5 million deal to buy five Sears stores and two Sears Auto Center stores and lease them back to the company for 10 years.
Sears’ stock decline stood out even on a day when the Dow Jones Industrial Average fell 0.6 percent, or 122.65 points, to 19,971.13. The benchmark index topped 20,000 for the first time last week as Trump’s move to start building his long-promised wall between the U.S. and Mexico got investors pumped up for billions in expenditures on infrastructure.
The new more inward-looking policies from the White House clearly can also cut the other way as investors gauged the fallout from a surprise, and quick, move to block some refugees from some primarily Muslim countries and word from the president that new polices would favor Christians.
Also losing ground in the market were the Bon-Ton Stores Inc., down 4.7 percent to $1.21; the Sears real estate spin-off Seritage Growth Properties, 3.8 percent to $40.87; beauty company Coty Inc., 3.3 percent to $18.85; Ascena Retail Group Inc., 1.9 percent to $4.61; Fossil Group Inc., 1.7 percent to $24.90, and Under Armour Inc., 1.7 percent to $25.09.