Sears Holdings Targets Cost Cuts

Sears Holdings, the retailer that’s seen its stock lose about two-thirds of its value over the past year before surging Friday, outlined plans to cut $1 billion in costs in a restructuring in 2017 as it makes a bid for profitability.

“To capture these savings, we plan to reduce our corporate overhead, more closely integrate our Sears and Kmart operations and improve our merchandising, supply chain and inventory management,” Chairman and Chief Executive Officer Edward S. Lampert said in a statement. “We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability.”

Sears has struggled with rising competition and has been shutting stores and offloading real estate. Earlier this year, it sold its Craftsman tool brand to Stanley Black & Decker (SWK). On Friday the company said it will continue to evaluate strategic options for its Kenmore and DieHard brands, along with Sears Home Services and Sears Auto Centers business through partnerships, joint ventures or other means.

The company sees total revenue of $6.1 billion for the fourth quarter of 2016, with comparable store sales down 10%. The net loss in the quarter is projected at between $635 million and $535 million, compared to the year earlier loss of $580 million.

By Stephen Holmes