Thursday focus: Shopping life
Retailers seeing their profits plummet have outlined more strategies that they hope will help them weather a desolate year.
Sears Holdings is closing stores and may shut down more if things don’t improve.
Gap and Limited Brands are cutting capital spending and opening fewer stores.
Kohl’s is emphasizing its budget-conscious prices to appeal to petrified shoppers.
Those moves illustrate how the retail landscape is changing as companies search for ways to cut costs.
Several companies also took charges due to significant declines in the value of businesses they own.
The effects of the worst holiday season in decades was on display, from customers who held off buying big-ticket appliances at Sears to mall shoppers who walked past Bath and Body Works.
Sears Holdings Corp., the operator of Sears and Kmart stores, reported fourth-quarter profit fell 55 percent, hurt by charges related to its Orchard Supply Hardware subsidiary and severance charges. Sales fell 12 percent to $13.28 billion, below analyst expectations, as the housing downturn hurt home appliance sales at its domestic Sears locations.
Kohl’s Inc. is opening 55 locations this year. That’s down from the 75 it opened last year, but up from the 50 it originally planned. Most of the openings are in former Mervyns locations Kohl’s bought in December.
Despite a grim outlook for the year, it hopes to gain market share by expanding into the stores Mervyns used to fill and promoting itself as a lower-priced shopping option.
Kohl’s saw its fourth-quarter profit fall 18 percent to $336 million, or $1.10 per share, from $412 million, or $1.31 per share a year ago.
Gap is also focusing its attention on the same things customers are. The company is working in particular to turn around its lower-priced Old Navy division, which has dragged down the overall business.
The company, which also operates its namesake stores and Banana Republic, saw its fourth-quarter profit fall 8 percent.
San Francisco- based Gap Inc. said it plans to decrease square footage by about 2 percent in 2009, opening 50 stores and shuttering 100, weighted toward Gap stores.
Associated Press