Sears Q2 loss widens amid weakening sales and loyalty program discounts
Hoffman Estates, Ill. — Sears Holdings’ second-quarter loss widened as the company was challenged with store closings, weak sales and deep discounts. Its performance was also impacted by the lingering effects from its spinoff of its Hometown and Outlet Stores banner.
For the period ended Aug. 3, Sears lost $194 million, compared with a loss of $132 million in the year-ago period.
Revenue dropped 6% to $8.87 billion, from $9.47 billion. Same-store sales fell 1.5%, with a 2.1% drop at Kmart and a 0.8% drop at Sears.
Sears chairman and CEO Eddie Lampert said he was “disappointed” in the chain’s results. But he cited “meaningful progress” during the quarter with the company’s Shop Your Way loyalty program, whose members represented over 65% of sales.
“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.
J.C. Penney adopts poison pill as protection against hostile takeovers
Plano, Texas — J.C. Penney Co. isn’t taking any chances. The retailer on Thursday announced it has adopted a one-year shareholder’s rights plan to protect itself against any future hostile takeover efforts.
The chain said the provisions of the plan will be effective until Aug. 20, 2014, unless rights are redeemed or exchanged for shares of its common stock on an earlier date. In its statement, Penney said the plan would be set into action if a person or group acquires 10% or more of the company’s shares or commences a tender or exchange offer that would result in someone owning more than that portion of the shares.
Penney said the plan wasn’t adopted in response to any effort to take control of the company. However, its adoption follows a public feud earlier this month between Penney’s board and activist investor William Ackman, the chain’s largest shareholder. Ackman, whose Pershing Square Capital Management owns nearly 18% of Penney, has since resigned from the board. Most recently, he hinted he might sell his stock.
This is the second time in recent years that Penney has put into place a “poison pill” plan.
Penney said that the plan does not include “certain affiliates of Pershing Square Capital Management, L.P. or certain affiliates of Vornado Realty Trust so long as such party’s beneficial ownership is permitted under such party’s letter agreements with the company.”
Accenture study reveals disconnect between CIOs and CMOs
New York — A disconnect between chief marketing officers and chief information officers threatens the ability of companies to deliver effective customer experiences, according to a new study by Accenture. Only one-in-10 of executives believing collaboration between CMOs and CIOs is currently at the right level.
The study, “The CMO-CIO Disconnect,” reveals that CIOs appear to be more committed to greater collaboration than CMOs. More than three out of four CIOs surveyed – 77% – agree that CMO-CIO alignment is important, compared to 57% of CMOs in the survey.
However, despite CIOs appearing more open to engaging with CMOs, only 45% of CIOs say that supporting marketing is near or at the top of their list of priorities.
Regarding the use of technology, CMOs and CIOs agree that technology is essential to marketing and that its primary purpose is to gain access to customer insight and intelligence (60% of CMOs and 73% of CIOs). But while CMOs claim that gaining customer insight is their number one motivator for collaborating with IT, CIOs rank this tenth on their list of reasons to work together. CIOs’ top motivation for collaborating is to improve the customer experience, which CMOs rank as their third most important motivator.
According to the Accenture report, CMOs and CIOs should consider taking the following actions to strengthen their alignment and improve collaboration:
- The CMO should be identified as the Chief Experience Officer and IT should be looked at as a strategic partner with marketing and not just as a platform provider.
- The skills mix in both organizations should be updated whereby the marketing department would become more tech savvy and the IT organization would become more agile and responsive to market demands.
- Both teams should agree on key business levers and embrace tools, processes and platforms to understand consumer intent and unlock consumer value.
“The CMO and CIO continue to work in silos, but now more than ever bridging the gap between those two organizations is critical for success,” said Brian Whipple, global managing director of Accenture Interactive. “With today’s multichannel consumer seeking highly relevant experiences and with digital and analytics platforms emerging to help companies, respond, marketing and IT executives must work more closely together.
“C-suite decision makers face a variety of challenges when collaborating, ranging from a lack of trust to differing business goals. These issues must be resolved to turn a company’s digital marketing capabilities into a platform for market differentiation, business growth, and profitability.”
The study was based on a survey of 400 senior marketing and 250 information technology executives in 10 countries.