Thursday, December 4, 2014

THESE RETAILERS COULD USE SOME HOLIDAY CHEER



BY ANNE D'INNOCENZIO


NEW YORK (AP) -- The holiday shopping season is always a make-or-break period for struggling retailers.

But this year, the fight to grab shoppers has intensified, making it difficult for stores to use the season that accounts for about 20 percent of the retail industry's annual sales to bounce back.

Stores face cautious shoppers who are juggling stagnant wages and higher costs for food and health care. And Web-savvy customers are using information easily available on their smartphones to hold out for ever-better deals. All of that means that stores have had to discount more - and earlier - this holiday shopping season.

"If you're a retailer on the edge, it's harder to maintain your viability and return to profitability because of the intense promotional environment," said Ken Perkins, president of RetailMetrics LLC., a retail research firm.

He expects fourth-quarter earnings for the 123 retailers he tracks will rise 7.7 percent, down from a projected 16 percent increase in June.

Here, four retailers with years of sales declines that could use a good holiday season:

SEARS HOLDINGS CORP.:

The problems: The Hoffman, Illinois-based company, which operates Kmart and Sears, has been struggling for years as it faces increasingly stiff competition from Wal-Mart, Target and Home Depot. Critics say Sears has failed to update shabby and tired stores.

Billionaire hedge fund manager Edward Lampert, now chairman and CEO, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. But that merger hasn't been successful, and the company's financial results keep worsening.

The company on Thursday said its revenue fell 13 percent in the third quarter. In the first three-quarters of the year, Sears has lost $1.6 billion.

It's on track to lose money for four straight years and record eight straight years of falling revenue when it reports its annual results early next year.


RADIOSHACK CORP.

The problems: Long known as a destination for batteries and obscure electronic parts, RadioShack's problem has been that the functions of so many products it sold have been taken up by smartphones.

So it sought to remake itself as a specialist in wireless devices and accessories. But growth in that business is slowing because more people have smartphones and see fewer reasons to upgrade.