Sears NASDAQ: SHLD
Sears Holdings Corp and Kmart Corp discontinued online sales of Trump-branded goods. Sales of Ivanka Trump’s products fell just before Nordstrom stopped selling her wares.
Sears Holdings Corp revealed the move yesterday. The company wants to refocus on goods with the best profit margins only.
WSJ came across internal Nordstrom data which showed Ivanka Trump-branded apparel sales fell over 70 percent. This figure compared poorly to last year’s figures.
A retail adviser said Nordstrom felt good due its store locations. The retail stores tend to reside in Democratic strongholds — cities and rich suburbs. Nordstrom feels it can survive political blow back for this reason.
Sears will close 150 stores soon — so the company welcomes any distracting news. A spokesman said the company wants to optimize its online wares. The retailer wants to zero in on its best products.
The President’s Sears products include bedding and lighting. Nordstrom, for its part, said selling the products did not make good business sense.
Sears Holdings has bigger problems. Competition from physical stores and online shops drive Sears Holdings to irrelevance. The latest earnings report reflect the ongoing struggle. According to Sears Holdings Corp CEO Edward S. Lampert:
“We remain fully committed to restoring profitability to our Company and are taking actions such as reducing unprofitable stores; reducing space in stores we continue to operate (including through the Seritage lease arrangement); reducing investments in underperforming categories; improving gross margin performance; and managing expenses relative to sales in key categories. While many observers have acknowledged the significant asset base of our Company, we understand the concerns related to our operating performance and are committed to transforming our Company through our Shop Your Way membership program and our Integrated Retail investments. At the same time, we will continue to explore options to recognize the inherent asset value in a manner that complements our transformation.”
But these words comes as Sears Holdings Corp plans to cut costs by $1b in 2017. This will mean more job cuts and store closures. The retailer wrote down the Sears name to $400m from $750m.
Sears Holdings Corp To Reduce Costs Further
The retailers stated that it will close 150 stores in the U.S. by Spring 2017. Plus, Sears Holdings will review its business to identify ways to improve.
The company will merge Kmart and Sears operations into a new corporate structure. This may cause job cuts, too. Other cuts include unprofitable products.
The company completed a $900 million deal to sell its Craftsman brand last month. Sears Holdings may sell Kenmore and Diehard brands.
The CEO believes Sears will have more money as a result of these actions. In addition, a path toward profitability will appear.
But some barriers persist. A class-action lawsuit accused Sears of selling its best stores for the CEO’s gain. After all, Lampert and his hedge fund own about 56 percent of Sears.
The company settled the lawsuit. But none of the officials admitted that the lawsuit’s claims were valid. They wanted to prevent a long, drawn-out lawsuit.