Sears Sales and Profit Decline in Q4
Hoffman Estates, Ill., In the fourth quarter ended Jan. 1, Sears’ profits had nowhere to go but down. The chain posted net income of $378 million, a far cry from $2.7 billion in the year-ago quarter, when the sale of the chain’s credit-card business boosted net income dramatically. Merchandise sales and services revenues for the 2004 fourth quarter were $9.6 billion, compared with $10.2 billion in the prior-year period, which contained an extra week.
“Fourth-quarter earnings and revenues met our expectations, with control of costs and expenses offsetting margin pressure,” said chairman and CEO Alan J. Lacy. “As we forecasted in October, domestic comparable-store sales were flat during the fourth quarter, with sales increases in October and November offset by a decline in December. The year was marked by further restructuring and repositioning of our core retail business, which slowed short-term results, but positions us well for the future.”
Sears is preparing for its merger with Kmart Corp. to take effect early this year, creating the third-largest U.S. chain, in terms of sales, behind Wal-Mart Stores and The Home Depot.
Retail Checks in to Plaza Hotel
New York City, The world famous Plaza Hotel overlooking Central Park in New York City will convert into a hotel-condominium-and-retail center, according to a Reuters report. The new Plaza will feature 150,000 sq. ft. to 160,000 sq. ft. of retail on a five- or six-level space described as an exclusive department store. The 850-room hotel will close in April and reopen next year, with 150 rooms and some 200 luxury condominiums, in addition to the retail space.
Kmart to Close Michigan DC
Troy, Mich., In a move described as unrelated to the Kmart-Sears merger, Kmart Holding Corp. said it will close its Canton distribution center in April. Some 325 workers are expected to be affected by the move to close the 1.1 million-sq.-ft. warehouse leased by Kmart—its only distribution center in Michigan. With fewer stores—Kmart’s count is down to 1,480 from 2,114 three years ago—the company said it could operate with fewer distribution centers.