Sears Holdings' losses mount in second quarter 2013

Shop Your Way, online business see growth

HOFFMAN ESTATES, Ill. — Sears Holdings Corp.'s losses grew in second quarter 2013, while EBITDA fell despite growth in the company's online business and loyalty program, the parent company of Kmart said Thursday.

The company, based in suburban Chicago, said its online business at Sears.com and Kmart.com grew by 20% compared with second quarter 2012, while members of the Shop Your Way loyalty program generated more than 65% of sales, compared with 55% during the same period last year. Chairman and CEO Eddie Lampert cited the figures as evidence of progress toward the company being a "member-centric" retailer.

"While the increase in Shop Your Way promotional activity and member redemptions resulted in a meaningful increase in our costs, it demonstrates that our members are deepening their engagement with our program, which will allow us to further accelerate our transformation," Lampert said. "At the same time, we recognize how important it is to improve the profitability of our company, and I am disappointed that we did not deliver a better result."

The company posted a loss of $194 million, compared with $132 million in second quarter 2012, on the back of sales of $8.9 billion, compared with $9.5 billion a year ago. Kmart posted sales of $3.17 billion, compared with $3.37 billion in second quarter 2012, as comps decreased by 1.5%, including a 2.1% decrease for Kmart and a 0.8% decrease for Sears; Kmart's decline was the result in decreases in the pharmacy, grocery and household categories, among others. Adjusted EBITDA for the quarter was a negative $55 million, compared with a positive $116 million in second quarter 2012.


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