Reports: Sears to Lay Off 3,300
First came news of plummeting sales, net income and operating income in its quarterly earnings. Chairman/CEO Alan J. Lacy cited weak demand in June and "the overhang of our spring apparel assortment and inventory issues." Net income was $53 million in the second quarter ended July 3 compared with $309 million last year, down 83 percent. Domestic comparable-store sales fell 2.9 percent.
More bad news came for many of the company's workers as news reports said 3,300 positions, representing 1.6 percent of the domestic head count, will be cut throughout the year. This includes 200 headquarters employees. The Chicago Tribune said 3,000 of the jobs are support personnel "performing administrative and back-office tasks in the field."
Analysts ripped company management, including Lacy.
"We continue to be affected by product assortment and inventory issues" in apparel, Lacy was quoted as saying. "We lacked a sufficient amount of fashion-oriented spring products in what has been a strong fashion-driven season."
Also, Lacy told analysts in a conference call that sales of Lands' End merchandise "have been flat at Sears stores and soft in the catalog for the first six months," according to a report in the Milwaukee Journal Sentinel. He reportedly also said the brand has been too expensive for customers in lower-income areas. Sears said it has reduced its offering of Lands' End children's clothing in stores.