05 December 2012, Fitch Ratings has dropped Sears Holdings to negative CCC. Fitch believes it is unlikely Sears/Kmart will recover, and even expects negative earnings in 2013. As other analysts have pointed out, Sears’ assets are still worth more than any expected revenues (one analyst said Sears was worth more dead than alive).
Executives of Sears Holdings got a some early Xmas money, by selling off, or trading in their vested shares of Sears Canada. Some execs traded in the vested shares for unvested, worth about $280,000. Those execs who already had unvested shares will get cash. According to paperwork filed with the SEC, the top five Sears Holdings execs got $1 million in cash!
The push to find independent owners of Sears Hometown stores increases, as profits increase. Reports say that profits at independently owned and operated stores jumped 29% from the year before!
In California, Sears returned to Banning, but as a smaller independently owned Hometown store. It’s being run by a former insurance salesman, and stocks only tools and appliances.
Also in California, a new Hometown store in Lake Elsinore is scheduled to open in February 2013. City officials say their tax revenues correlate with Sears’ increased profits in tools and appliances sold at the independent stores: “We certainly can tell based on Riverside County sales tax reports that people are spending money in these categories…”-Kim Joseph Cousins, Lake Elsinore Valley Chamber of Commerce.
Sears is looking for a Hometown owner in Sturgeon Bay, Wisconsin: “We’re looking for a person who wants to operate a successful business and is customer service oriented. This is an outstanding retail opportunity for a dedicated individual to participate in one of America’s hottest growth opportunities.”-Ed Sosniak, regional development manager for Sears Hometown Stores
Hometown stores are hot, for Sears Holdings, because the onus of paying the rent, utilities and employees is on the independent owner: “The local owner is responsible for start-up and on-going operating expenses associated with the store including: building or leasing a facility; providing in-store fixtures; hiring and training employees; payroll; and insurance…”
Sears makes its money by selling the owner the merchandise. Hometown stores also employ far fewer people than a full blown Sears.
Sears online sales, cell phone sales, store-to-home sales and web-to-store sales also jumped 28%, however electronics sales crashed 30%!
For Kmart stores there’s been increasing reports of theft. A man in Florida was captured on video stealing video game systems, four times! The police are looking for him.
In Wyoming a Kmart was robbed by a woman with a gun (oh no, another one for Bob Costas). What did she want? Prescription drugs!
In Massachusetts, two women were arrested after trying to steal more than $1,000 in merchandise. And in just the past couple of days, three other women were arrested for trying to steal $130 worth of merchandise!
In Ohio, a Kmart employee was attacked by a man with a box cutter (Bob Costas you better call for the banning of box cutters): “The suspect demanded money and was armed with a box cutter. While the victim was attempting to get his wallet, the suspect began slashing at the victim.”-Ronald Mizner Junior, North Canton Police
In New York, a man who just got out of prison apparently killed himself with drugs (Bob Costas you paying attention). Police say he was found in a stolen car in a Kmart parking lot.
‘Tis the season