S&P Lowers Sears Rating
New York City, Standard & Poor’s Ratings Services today lowered Sears, Roebuck and Co. ratings to speculative grade and off watch. The action follows the completion of Sears’ merger with Kmart Holding Corp. in a $12 billion transaction, and the creation of a new parent company, Sears Holdings Corp.
S&P lowered the long-term corporate credit rating from ‘BBB’ to ‘BB+.’ The short-term rating on Sears Roebuck Acceptance Corp. was lowered from ‘A-2’ to ‘B.’
According to S&P’s credit analyst Gerald Hirschberg, “The downgrade reflects an increase in business risk for the combined company, as both Sears and Kmart will continue to be challenged to improve store productivity and profitability.” Hirschberg went on to say that, while the merger represents a unique opportunity for Sears to accelerate its off-the-mall strategy by converting hundreds of Kmart stores to Sears stores, it likely will take a number of years before any reasonable assessment of the ultimate viability of the merger can be made.
May Names John Dunham Chairman and CEO
St. Louis, May Department Stores has tapped John Dunham as its permanent chairman and CEO, prior to the retailer’s $11 billion acquisition by rival Federated Department Stores Inc. Dunham already had been May’s president, and had assumed the duties of acting chairman and CEO upon the Jan. 14 resignation of Gene Kahn. The executive appointment was revealed in a filing this week with the Securities and Exchange Commission.
Hastings Delays Report
Amarillo, Texas, Hastings Entertainment Inc. on Friday delayed the release of its fourth-quarter and full-year earnings by three days so the company can make changes to the way it accounts for store leases. It will release its earnings on Thursday. Hastings operates 150 stores in the West and Midwest.