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Armed with a laser focus to generate positive EBITDA, Sears Holding Corporation conducted various measures in the first quarter as it transitions to an asset-light, member-centric integrated retailer. Eliminating losses, while continuing to meet all of its financial obligations, remains the top goal for Sears and its Shop Your Way loyalty program is a focal strategic point.
“We continue to make progress in our transformation to a more asset-light, member-centric integrated retailer leveraging our Shop Your Way platform,” Rob Schriesheim, Executive Vice President and Chief Financial Officer for Sears, said during the May 26 first-quarter earnings call, according to Seeking Alpha. “Our member sales penetration has grown from 58% to 73% since 2011. Going forward, we intend to increase our level of member engagement while focusing on our best members, our best stores, and our best categories.”
Sears has evaluated its store space and productivity to best meet its loyalty program members’ needs and accelerated the closing of 50 unprofitable stores. An additional 117 stores will be closed this year.
“In the first quarter of 2016, we reduced expenses by $176 million on a comparable basis and since 2012, we have reduced expenses by $1.6 billion,” Schriesheim said, adding that the focus is on store-level marketing expenditures and staffing levels; and improving inventory management. We do not intend to borrow money to fund continued operating losses, but rather to provide us with flexibility as we transition to an asset-light member-centric integrated retailer leveraging our Shop Your Way program. Given that our first quarter performance fell short of this goal, the additional store closings and expense reductions are examples of the types of actions we will take in response to such performance; whereas in the past, we were more patient while we pursued other actions to generate profit.”
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