When traditional brick-and-mortar stores struggle to remain profitable, most people point their fingers at Amazon. While Sears Holdings CEO Eddie Lampert said online retail has hurt Sears and Kmart, he blames the billions of dollars Sears spent on pension plans over the last several years.
Sears Holdings has contributed almost $2 billion in the last five years, and $4.5 billion since 2005 when Sears and Kmart merged, Lampert said in a blog post Friday.
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“Had the company been able to employ those billions of dollars in its operations, we would have been in a better position to compete with other large retail companies, many of which don’t have large pension plans, and thus have not been required to allocate billions of dollars to these liabilities,” Lampert said.
As Sears Holdings attempts to return to profitability in a changing retail landscape, Lampert said it has shifted focus from traditional retail to a member-centric company.
“The journey to running a member-centric company on a consistently profitable basis has taken far longer than we expected,” he said.
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Long-term plans include closing unprofitable stores, including the Dayton Mall store in November, liquidating those stores’ inventory and reducing workforce. The company also plans to sell properties, partner with third parties that can expand brand assets and reduce operating expenses.
“The reality is that, while we strongly believe in our vision and our strategy for the Company, we also have had to address the pressures that result from the unsatisfactory operating performance as well as the ongoing burden of our legacy pension liabilities…We continue to believe that Sears can successfully evolve into a smaller but profitable company,” Lampert said.
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