Sears Holdings Corporation updates on its strategic restructuring program

  • Announces incremental actions to streamline its operations and deliver cost savings
  • On track to achieve $1.25 billion in annualized cost savings in 2017

HOFFMAN ESTATES, Ill., 2017-Jun-14 — /EPR Retail News/ — Sears Holdings Corporation (“Holdings,” “we,” “us,” “our,” or the “Company”) (NASDAQ: SHLD) today (June 13, 2017) announced important actions related to its previously disclosed strategic restructuring program, which is designed to deliver $1.25 billion in annualized cost reductions. These actions include the elimination of approximately 400 full-time positions at our corporate offices and support functions globally, in addition to certain positions at our field operations as well as the store closures we initiated last week. Combined with the restructuring actions announced since the beginning of the fiscal year, Sears Holdings has actioned nearly $1.0 billion in annualized cost savings to date and is on track to deliver $1.25 billion in annualized savings through actions taken in fiscal year 2017. The Company will continue to take all necessary action to drive improvements in our organization to achieve our profitability objective with a greater focus on Best Members, Best Categories and Best Stores.

“We are making progress with the fundamental restructuring of our operations that we initiated in February,” said Edward S. Lampert, Chairman and Chief Executive Officer of Sears Holdings. “We remain focused on realigning our business model in an evolving and highly competitive retail environment. This requires us to optimize our store footprint and operate as a leaner and simpler organization.”

Organizational Restructuring

As part of the Company’s ongoing efforts to simplify its organizational structure and enabling greater consolidation of the Sears and Kmart corporate and support functions, approximately 400 full-time positions at our corporate offices and support functions will be eliminated. The majority of these positions are related to the corporate workforce at Sears Holdings’ headquarters in Hoffman Estates. In addition, certain positions at our field operations will be impacted by these restructuring actions. While the total number of people who are directly affected represents a small fraction of our total headcount, we are conscious of the impact on individual employees. We are providing eligible associates severance compensation and transition assistance. As part of the organizational restructuring, the company first eliminated open positions and reduced contract employees in an effort to minimize the impact on full-time employees.

Transformation Progress to Date

Today’s announcement is in addition to the significant actions the Company has already taken. Since the beginning of the calendar year 2017, we have taken decisive steps to improve our operational performance, enhance our financial flexibility and drive our strategic transformation, including:

  • Significant progress on our strategic $1.25 billion restructuring program, with nearly $1.0 billion in annualized cost savings already actioned to date, including the actions announced today;
  • Paydown of approximately $418 million of term loans outstanding under our revolving credit facility and extension of the maturity of $400 million of our $500 million 2016 Secured Loan Facility up to twelve months;
  • Entered into an agreement with Metropolitan Life Insurance Company (“MLIC”) to annuitize $515 million of pension liability to reduce the overall size of the Company’s pension plan, future cost volatility and plan administrative expenses;
  • Monetization of certain real estate properties that generated over $200 million in proceeds;
  • Continued growth of our Shop Your Way ecosystem through strategic partnerships and value offerings, including recently announced partnerships with Citi and Time Inc.

Path Forward

We will continue to take all necessary action to drive improvements in our organization to achieve our profitability objective with a greater focus on Best Members, Best Categories, Best Stores strategy. Going forward, we will focus our investments to drive the growth of our valuable assets, such as our Shop Your Way platform; our Kenmore, Craftsman at Sears and DieHard brands; the nation’s largest product repair services provider, Sears Home Services; and Sears Auto Centers, a leading provider of automotive maintenance and repair services and parts. In addition, we continue to evaluate strategic options across our portfolio to unlock value from our assets through partnerships, joint ventures or other means.

Forward-Looking Statements
This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about our liquidity, our ability to achieve our cost-savings and profitability objectives, our ability to successfully achieve our plans to generate liquidity through monetization of our real estate, additional debt financing actions, asset securitizations or other potential transactions or otherwise, our intention to explore potential partnerships or other transactions involving our Kenmore and DieHard brands and our Sears Home Services and Sears Auto Centers businesses, the impact of the agreement with MLIC, and other statements that describe the Company’s plans. Whenever used, words such as “will,” “expect,” and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company’s control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Detailed descriptions of risks, uncertainties and factors relating to Sears Holdings are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.

About Sears Holdings Corporation

Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way, a social shopping platform offering members rewards for shopping at Sears and Kmart, as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE: Sears Holdings Corporation

Sears Holdings Corporation announces improvement in 4Q 2016 operating performance

  • Preliminary fourth quarter 2016 operating results represent significant year-over-year improvement
  • Launches comprehensive restructuring to streamline operations, targeting at least $1.0 billion in annualized cost savings in 2017
  • Right-sizes asset-based credit facility, creating an incremental $140[1] million in liquidity
  • Plans to reduce outstanding debt and pension obligations by at least $1.5 billion, utilizing proceeds from recent transactions and operational improvements

HOFFMAN ESTATES, Ill., 2017-Feb-11 — /EPR Retail News/ — Sears Holdings Corporation (“Holdings,” “we,” “us,” “our,” or the “Company”) (NASDAQ: SHLD) today (Feb. 10, 2017) announced that it delivered meaningful improvement in operating performance for the fourth quarter of 2016, and outlined important actions to drive profitability. These include steps to enhance the Company’s liquidity and financial flexibility, as well as a strategic restructuring program intended to streamline operations, further improve operating performance and target cost reductions of at least $1.0 billion on an annualized basis.

Edward S. Lampert, Chairman and Chief Executive Officer of Sears Holdings, said, “We significantly improved our operating performance and made progress toward profitability in the fourth quarter of 2016. In the first several weeks of 2017, we undertook a series of transactions to optimize our capital structure and unlock value across our wide range of assets. We also reached an agreement to amend our asset-based credit facility which further enhances our liquidity and financial flexibility. Furthermore, we intend to use net proceeds from our announced Craftsman and real estate transactions, as well as from improvements in the operating performance of the Company, to meaningfully reduce our outstanding obligations and their associated expenses.

“To build on our positive momentum, today we are initiating a fundamental restructuring of our operations that targets at least $1.0 billion in cost savings on annualized basis, as well as improves our operating performance. To capture these savings, we plan to reduce our corporate overhead, more closely integrate our Sears and Kmart operations and improve our merchandising, supply chain and inventory management.

“We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability. In addition, we believe these actions will enable us to focus our investments to drive our strategic transformation and the evolution of our Shop Your Way ecosystem through value enhancing partnerships, compelling offerings and a seamless online and in-store shopping experience for our members,” Mr. Lampert concluded.

Next Phase of Our Transformation

Sears Holdings has initiated a restructuring program targeted to deliver at least $1.0 billion in annualized cost savings in 2017. These savings include cost reductions from the previously announced closure of 108 Kmart and 42 Sears stores.

Under the restructuring program, we intend to:

  • Simplify Sears Holdings’ organizational structure, including greater consolidation of the Sears and Kmart corporate and support functions, as well as improve accountability for profitability at our store and online channels;
  • Implement an integrated model to drive efficiencies in pricing, sourcing, supply chain and inventory management;
  • Optimize product assortment at Sears and Kmart stores, using data analytics to better align with preferences of our Best Members focusing on profitable, high-return Best Categories; and
  • Actively manage our real estate portfolio to identify additional opportunities for reconfiguration and reduction of capital obligations.

Profitability

In addition to the cost reduction target announced today, we continue to assess our overall operating model and capital structure to become a more agile, asset-light and innovative retailer focused on member experience. To help drive our profitability, we intend to:

  • Capitalize on valuable real estate through potential in-store partnerships, sub-divisions, and reformatting to support our Integrated Retail model; and
  • Continue to evaluate strategic options for our Kenmore® and DieHard® brands and our Sears Home Services and Sears Auto Centers business through partnerships, joint ventures or other means.

We expect these actions will enable us to focus our investments on driving our strategic transformation and enhancing the value of our Shop Your Way program for our millions of members and the strategic partners that we attract to the program. Our Shop Your Way platform rewards members for buying the products and services they want every day. Through our extensive network of thousands of top brands and millions of products, members can earn points to use on future purchases. Members also have access to special pricing, sales and digital coupons, as well as personalized services and advice.

Transformation Progress to Date

Today’s announcements build on the path we have taken since the beginning of 2017 to improve operational performance and liquidity. Since the calendar year started, we have taken the following strategic actions to strengthen our financial position:

  • Obtaining an additional $179 million of loan proceeds, which fully utilizes the $500 million Senior Secured Loan Facility entered into on January 4, 2017;
  • Closing a $72.5 million real estate sale on January 26, 2017 for five Sears Full-line stores and two Sears Auto Centers;
  • Initiating the closing process of the 150 stores announced during our fourth quarter 2016 with the expectation to complete the closures of all 150 stores during the first quarter of 2017;
  • Engaging Eastdil Secured to market and sell at least $1.0 billion of certain real estate properties under the direction of a committee of the Board of Directors; and
  • Announcing the Craftsman® transaction for $775 million in cash plus participation in the externalization of the Craftsman® brand by Stanley Black& Decker.

Additional Financial Flexibility

On February 10, 2017, the Company entered into an agreement to amend our existing asset-based credit facility. The amendment provides a $140 million increase to available borrowing capacity under our revolver as compared to availability reported at the end of the third quarter of 2016. Sears Holdings concluded the fourth quarter of 2016 with no borrowings and $464 million of letters of credit outstanding, against its asset-based credit facility. The amendment provides immediate additional liquidity and financial flexibility to the Company.

On a pro forma basis, giving effect to the amendment of our credit facility, our total liquidity and liquid assets would have been over $4.0 billion at the end of third quarter of 2016. The amendment will reduce the aggregate revolver commitments from $1.971 billion to $1.5 billion, but will implement other modifications to covenants and reserves against the credit facility borrowing base that improve net liquidity. The amended credit facility is smaller in size, reflecting the Company’s reduced needs consistent with lower inventory levels associated with our transforming business model, which has fewer physical stores and a greater online presence. The amendment also provides additional flexibility in the form of a $250 million increase in the general debt basket from $750 million to $1.0 billion.

We are targeting a reduction in our outstanding debt and pension obligations of $1.5 billion for fiscal 2017 through improving profitability, asset sales, and working capital management. Sears Holdings has contributed almost $4.0 billion to our pension plan since 2005, driven largely by the prolonged low interest rate environment.

Fourth Quarter Update

As previously indicated in our January 2017 update, sales declined in the fourth quarter of 2016 compared to the prior year fourth quarter due to a combination of the competitive retail environment and fewer operating stores, as we emphasized improving profitability. Accordingly, we have continued to manage inventory and costs closely resulting in a notable improvement in our short-term operating performance and progress toward our profitability goals.

We expect total revenues of $6.1 billion and $22.1 billion for the fourth quarter and full-year of 2016, respectively. Total comparable store sales for the fourth quarter have declined 10.3%, comprised of a decrease of 8.0% at Kmart and a decrease of 12.3% at Sears Domestic. We expect that our fourth quarter 2016 net loss attributable to Sears Holdings’ shareholders will range between $635 million and $535 million, which is inclusive of a non-cash impairment charge related to the Sears trade name of between $350 million and $400 million. This compares to a net loss attributable to Sears Holdings’ shareholders of $580 million in the fourth quarter of 2015, which was inclusive of a non-cash impairment charge related to the Sears trade name of $180 million.

In addition, our preliminary fourth quarter 2016 Adjusted EBITDA was $(61) million, compared to Adjusted EBITDA of $(137) million in the fourth quarter of 2015. This significant improvement in Adjusted EBITDA has been driven by tighter expense control and inventory management.

We have provided below a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net loss attributable to Sears Holdings’ shareholders.

Adjusted EBITDA Reconciliation

In addition to our net loss attributable to Sears Holdings’ shareholders determined in accordance with Generally Accepted Accounting Principles (“GAAP”), for purposes of evaluating operating performance, we use Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), which is a non-GAAP measure. The table set forth below provides a reconciliation of as-adjusted amounts to net loss attributable to Sears Holdings’ shareholders, the most directly comparable GAAP financial measure. We believe that our use of Adjusted EBITDA provides an appropriate measure for investors to use in assessing our performance across periods, given that these measures provide adjustments for certain significant items, which may vary significantly from period to period, improving the comparability of year-to-year results and is therefore representative of our ongoing performance. Therefore, we have adjusted our results to make our statements more useful and comparable. However, we do not, and do not recommend that investors solely use adjusted amounts to assess our financial performance.

Forward-Looking StatementsThis press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about our strategic restructuring, our transformation through our integrated retail strategy, our plans to redeploy and reconfigure our assets, our plans to market and sell a portion of our existing real estate assets, our expectation of closing the sale of our Craftsman brand as previously announced, our liquidity, our ability to exercise financial flexibility as we meet our obligations and pursue possible strategic transactions, and other statements that describe the Company’s plans. Whenever used, words such as “will,” “expect,” and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company’s control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Detailed descriptions of other risks relating to Sears Holdings are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law. Results presented herein are unaudited. The unaudited and estimated financial results for the fourth quarter of 2016 contained in this press release reflect a number of complex and subjective judgments and estimates about the appropriateness of certain reported amounts and disclosures. Our financial statements for the 2016 fiscal year are not finalized. We are required to consider all available information through the finalization of our financial statements and their possible impact on our financial conditions and results of operations for the period, including the impact of such information on the complex judgments and estimates referred to above. As a result, subsequent information or events may lead to material differences between the information about the results of operations described herein and the results of operations described in our subsequent annual report. You should consider this possibility in reviewing the financial information for the period described above.

About Sears Holdings Corporation

Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com

[1] Based on the assumption that the extension is applied to the credit facility availability as of October 29, 2016.

MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE: Sears Holdings Corporation

Sears Holdings Corporation enters into $500 million secured loan facility maturing in July 2020

HOFFMAN ESTATES, Ill., 2017-Jan-05 — /EPR Retail News/ — Sears Holdings Corporation (the “Company”) (NASDAQ: SHLD) announced today (Jan. 4, 2017) that certain of its subsidiaries (the “Borrowers”) have entered into a $500 million committed secured loan facility (the “Loan Facility”) maturing in July 2020. $321 million was funded under the Loan Facility today and up to an additional $179 million may be drawn by the Borrowers in the future.

The Loan Facility is secured by mortgages on 46 real properties owned by the Company’s subsidiaries and will be secured by additional real properties if the remaining $179 million loan commitment is drawn. The Loan Facility bears interest at a rate of 8% per annum and is guaranteed by the Company. The Loan Facility is intended to provide the Company with additional liquidity to fund its operations while it initiates a process to market and sell a portfolio of its real estate assets, the proceeds of which would primarily be used to repay outstanding indebtedness.”This Loan Facility will provide Sears Holdings with additional financial flexibility and support our operations as we meet all of our financial obligations,” said Jason M. Hollar, Sears Holdings’ chief financial officer.

Entities affiliated with ESL Investments, Inc. are the lenders under the Loan Facility. Edward S. Lampert, the Company’s Chief Executive Officer and Chairman, controls ESL Investments, Inc.
The terms of the Loan Facility were approved by the Related Party Transactions Subcommittee of the Board of Directors of the Company, with advice from Centerview Partners and Weil Gotshal & Manges, the Subcommittee’s outside financial and legal advisors.

Forward-Looking Statements
This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including statements about our intention and ability to obtain the remaining $179 million in advances contemplated by the Loan Facility and our intention to market and sell real properties and repay outstanding indebtedness. Forward-looking statements are subject to risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. Factors that could cause actual results to differ from those set forth in the forward-looking statements include, but are not limited to, those discussed in this release and those discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.

About Sears Holdings Corporation

Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE: Sears Holdings Corporation

Sears Holdings Corporation announces 2Q financial results ended July 30, 2016

HOFFMAN ESTATES, Ill., 2016-Aug-26 — /EPR Retail News/ — Sears Holdings Corporation (“Holdings,” “we,” “us,” “our,” or the “Company”)(NASDAQ: SHLD) today (Aug 25, 2016) announced financial results for its second quarter ended July 30, 2016. As a supplement to this announcement, a presentation, pre-recorded conference and audio webcast are available at our website http://searsholdings.com/invest.

In summary, we reported:

  • Net loss attributable to Holdings’ shareholders of $395 million ($3.70 loss per diluted share) for the second quarter of 2016 compared to net income attributable to Holdings’ shareholders of $208 million ($1.84 per diluted share) for the prior year second quarter;
  • Adjusted for significant items, we would have reported a net loss attributable to Holdings’ shareholders of $217 million ($2.03 loss per diluted share) for the second quarter of 2016 compared to a net loss attributable to Holdings’ shareholders of $256 million ($2.40 loss per diluted share) in the prior year second quarter;
  • Adjusted EBITDA of $(191) million in the second quarter of 2016, improved from $(226) million in the prior year second quarter;
  • Kmart and Sears Domestic comparable store sales declined 3.3% and 7.0%, respectively, in the second quarter of 2016;
  • During the second quarter of 2016, the Company generated cash proceeds of $176 million from the sale of real estate properties and other asset sales; and
  • We received an offer from ESL Investments, Inc. (“the ESL proposal”) to provide $300 million of additional debt financing secured by a junior lien against our inventory, receivables and other working capital, which offer has been accepted.

Edward S. Lampert, Holdings’ Chairman and Chief Executive Officer, said, “We continue to face a challenging competitive environment and while we continue to focus on our overall profitability, including managing expenses, we reported a net loss for the second quarter. We are encouraged by the year-over-year improvement in our Adjusted EBITDA and feel we are making progress in our transformation as we remain focused on our best stores, our best members and our best categories to drive our business and enhance the member experience.”

Rob Schriesheim, Holdings’ Chief Financial Officer, said, “During the first half of 2016, we have demonstrated our ability to finance our transformation strategy with the levers available to us through our portfolio of assets and businesses. The sale of assets, combined with the previous closing of the $750 million Term Loan, together with the $500 million Secured Loan Facility, provided us with over $1.4 billion of financing during the first half of 2016. We have continued to demonstrate our flexibility in the third quarter of 2016 with the announcement of the recently received offer to provide $300 million of additional debt financing. As we move into the second half of 2016, we continue to explore alternatives for our Kenmore®, Craftsman® and DieHard® and Sears Home Services businesses by evaluating potential partnerships or other transactions. As we navigate through the current challenging retail environment and executing our transformation, we will continue to take actions to adjust our capital structure and manage our business to enable us to execute on our transformation while meeting all of our financial obligations.”

Financial Results

Revenues decreased approximately $548 million to $5.7 billion for the quarter ended July 30, 2016, compared to revenues of $6.2 billion for the quarter ended August 1, 2015. The decrease in revenue was primarily driven by a 5.2% decline in comparable store sales during the quarter, which accounted for $240 million of the revenue decline, and by having fewer Kmart and Sears Full-line stores in operation, which accounted for $199 millionof the decline. In addition, we also experienced a decline in revenues from Sears Hometown and Outlet Stores, Inc. of approximately $75 million during the second quarter of 2016.

At Kmart, comparable store sales decreased 3.3%. We experienced comparable store sales increases in several categories this quarter, including toys, jewelry, mattresses and apparel, which were more than offset by declines in the pharmacy, grocery & household and consumer electronics categories. Sears Domestic comparable store sales decreased 7.0%, primarily driven by decreases in home appliances, apparel, consumer electronics, footwear, lawn & garden and tools.

During the quarter, gross margin decreased $175 million due to the above noted decline in sales, as well as a decline in our gross margin rate. As a result of the Seritage and JV transactions, the second quarter of 2016 included additional rent expense of approximately $48 million and the second quarter of 2015 included additional rent expense and assigned sub-tenant rental income of approximately $26 million.

Kmart’s gross margin rate for the second quarter improved 10 basis points compared to the prior year second quarter, while Sears Domestic’s gross margin rate declined 150 basis points. Excluding the impact of significant items noted in our Adjusted Earnings Per Share tables, Kmart’s gross margin rate would have declined 10 basis points, while Sears Domestic’s gross margin rate would have declined 100 basis points compared to the prior year second quarter. While we experienced improvement in several categories in our Kmart format, the overall decline in Kmart’s gross margin rate was primarily due to declines in the grocery & household and apparel categories. The decline in Sears Domestic’s gross margin rate was primarily driven by a decline in the apparel category. The margin rate in both segments was negatively impacted by increased promotional markdowns, including an increase in Shop Your Way® expense.

Selling and administrative expenses decreased $210 million in the second quarter of 2016 compared to the prior year quarter. Excluding significant items noted in our Adjusted Earnings Per Share tables, selling and administrative expenses declined $193 million primarily due to a decrease in payroll expense. In addition, advertising expense declined as we shifted away from traditional advertising to the use of Shop Your Way® points expense, which is included within gross margin.

Our effective tax rate for the second quarter of 2016 was an expense of 3.4%. The application of the requirements for accounting for income taxes in interim periods, after consideration of our valuation allowance, causes a significant variation in the typical relationship between income tax expense and pretax income. During the prior year quarter, the Company realized a significant tax benefit on the deferred taxes related to indefinite-life assets associated with the properties sold in the transaction with Seritage. As such, our effective tax rate for the second quarter of 2015 was a benefit of 1,700.0%.

The Company reported a net loss attributable to Holdings’ shareholders of $395 million for the second quarter of 2016 compared to net income attributable to Holdings’ shareholders of $208 million for the prior year period. Net loss attributable to Holdings’ shareholders for the second quarter of 2016 and net income attributable to Holdings’ shareholders for the second quarter of 2015 included significant items noted in our Adjusted Earnings Per Share tables, which aggregated to expense of $178 million and income of $464 million, respectively. Adjusting for these significant items, we would have reported a net loss attributable to Holdings’ shareholders of $217 million and $256 million in the second quarter of 2016 and 2015, respectively.

Financial Position

The Company’s cash balances were $276 million at July 30, 2016 compared with $238 million at January 30, 2016. Short-term borrowings totaled$164 million at the end of the second quarter of 2016 compared to $797 million at January 30, 2016.

Merchandise inventories were $4.7 billion at July 30, 2016, compared to $5.0 billion at August 1, 2015, while merchandise payables were $1.3 billion and $1.7 billion at July 30, 2016 and August 1, 2015, respectively.

At July 30, 2016, we had utilized approximately $719 million of our $1.971 billion revolving credit facility due in 2020 (consisting of $63 million of borrowings and $656 million of letters of credit outstanding). The amount available to borrow under our credit facility was approximately $191 million, which reflects the effect of our springing fixed charge coverage ratio covenant and the borrowing base limitation in our revolving credit facility, which varies primarily based on our overall inventory and receivables balances. Under the credit facility agreement, the fixed charge coverage ratio changed in August 2016, which increases our availability to borrow under the credit agreement by approximately $175 million.

Total long-term debt (including current portion of long-term debt and capital lease obligations) was $3.4 billion and $2.2 billion at July 30, 2016 and January 30, 2016, respectively.

In August 2016, we received the ESL proposal to provide $300 million of additional debt financing secured by a junior lien against our inventory, receivables and other working capital, which offer has been accepted. Under the ESL proposal, the Company may, in its discretion, offer to third party investors the right to participate in up to an additional $200 million of debt financing on the same terms and conditions. The financing is subject to customary conditions and is expected to close in the next 7 to 10 business days. The terms of the debt financing were approved by the Related Party Transactions Subcommittee of the Board of Directors of the Company, with advice from Centerview Partners and Weil Gotshal & Manges, the Subcommittee’s outside financial and legal advisors.

Update on Strategic Initiatives

On May 26, 2016, we announced our intention to explore alternatives for our Kenmore®, Craftsman® and DieHard® brands and our Sears Home Services business by evaluating potential partnerships or other transactions that could expand distribution of our brands and service offerings to realize significant growth. We initiated a formal process and have received interest from a variety of potential partners, both domestic and international, and including retailers, original equipment manufacturers, financial investors and others. Citigroup Global Markets and LionTree Advisors are assisting us in these efforts as we continue our assessment over the next few months. There can be no assurance that we will complete one or more transactions, but we intend to aggressively evaluate all of the potential alternatives available to these businesses.

Adjusted EBITDA

In addition to our net income (loss) attributable to Sears Holdings’ shareholders determined in accordance with Generally Accepted Accounting Principles (“GAAP”), for purposes of evaluating operating performance, we use Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) and Adjusted Earnings Per Share (“Adjusted EPS”), which are non-GAAP measures. The tables attached to this press release provide a reconciliation of GAAP to as adjusted amounts. We believe that our use of Adjusted EBITDA and Adjusted EPS provides an appropriate measure for investors to use in assessing our performance across periods, given that these measures provide adjustments for certain significant items which may vary significantly from period to period, improving the comparability of year-to-year results and is therefore representative of our ongoing performance. Therefore, we have adjusted our results for them to make our statements more useful and comparable. However, we do not, and do not recommend that you, solely use Adjusted EBITDA or Adjusted EPS to assess our financial and earnings performance. We also use, and recommend that you use, diluted earnings (loss) per share in addition to Adjusted EPS in assessing our earnings performance.

As a result of the Seritage and JV transactions, Adjusted EBITDA for the second quarter of 2016 and 2015 included additional rent expense of approximately $48 million and $26 million, respectively, while the first half of 2016 and 2015 included additional rent expense of approximately $102 million and $26 million, respectively. Due to the structure of the leases, we expect that our cash rent obligations to Seritage and the joint venture partners will decline, over time, as space in these stores is recaptured. From the inception of Seritage to date, we have received recapture notices on 15 properties, which is estimated to reduce the rent expense by approximately $8 million on an annual basis.

Forward-Looking Statements

Results are unaudited. This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about our transformation through our integrated retail strategy, our plans to redeploy and reconfigure our assets, our liquidity, including our expectation to close the $300 million of additional debt financing from ESL Investments Inc., our ability to exercise financial flexibility as we meet our obligations and pursue possible strategic transactions, our intention to explore potential partnerships or other transactions involving our Kenmore®, Craftsman® and DieHard® brands and our Sears Home Services business, and other statements that describe the Company’s plans. Whenever used, words such as “will,” “expect,” and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company’s control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Detailed descriptions of risks, uncertainties and factors relating to Sears Holdings are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.

Pre-Recorded Conference Call and Audio Webcast

Sears Holdings, in conjunction with today’s financial results announcement, will simultaneously post a pre-recorded conference call and audio webcast on its corporate website. It will feature prepared remarks from Robert A. Schriesheim, executive vice president and chief financial officer, who will focus his comments to provide additional context around the quarter. The pre-recorded conference call may be accessed by telephone at 844.826.0613 or 973.200.3092 (conference ID: 67300953), and on Sears Holdings’ website at http://www.searsholdings.com/invest/ under “Events & Presentations.” The accompanying presentation and transcript will be posted online in conjunction.

About Sears Holdings Corporation

Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart, as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

Source: Sears Holdings Corporation

Sears Holdings Corporation to release financial results for its 2Q FY2016 on August 25, 2016

HOFFMAN ESTATES, Ill., 2016-Aug-15 — /EPR Retail News/ — Sears Holdings Corporation (NASDAQ: SHLD) today announced the company currently plans to release financial results for its fiscal 2016 second quarter on or about Thursday, August 25, 2016.

About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

NEWS MEDIA CONTACT:

Sears Holdings Public Relations
(847) 286-8371

SOURCE Sears Holdings Corporation

Sean Skelley appointed President Home Services at Sears Holdings Corporation

HOFFMAN ESTATES, Ill., 2015-10-12 — /EPR Retail News/ — Sears Holdings Corporation (NASDAQ: SHLD) today announced the appointment of Sean Skelley as president, Home Services. In his new role with the company, Skelley will be accountable for all aspects of the company’s Home Services business.

Skelley’s background includes over 20 years with Best Buy Co. Inc., where he progressed with increasing levels of responsibility, from stores to merchandising/category management, to business development and services. As senior vice president of services strategy, he led one of Best Buy’s key growth initiatives, “Win the Home with Service.” He was also responsible for the acquisition and nationwide rollout of Geek Squad, a 24/7 computer support task force, building it into a billion dollar global enterprise providing technology solutions.

Skelley most recently served as the senior vice president of service solutions for Asurion, a global organization providing device protection and support services for smartphones, tablets, consumer electronics and appliances.

“Sean is a proven, innovative leader who brings a history of strategic customer focus to his new role as the leader of Home Services,” said Edward S. Lampert, Sears Holdings’ Chairman and Chief Executive Officer. “He possesses a unique understanding of service and product repair needs, and his abilities to identify service efficiencies will be a great asset as we focus on our members and drive the company’s transformation.”

Sears Home Services is the number one national service provider and trusted advisor invited into millions of homes each year. Home Services is a key element in our active relationship with more than 39 million households. With approximately 7,500 service technicians making over 13 million service and installation calls annually, this business delivers a broad range of retail-related residential and commercial services.

About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

About Sears Home Services
Sears Home Service, the nation’s largest product repair service provider, is a key element in Sears Holdings active relationship, providing more than 52 million solutions for homeowners annually. This business delivers a broad range of retail-related residential and commercial services across all 50 states, Puerto Rico, Guam and the Virgin Islands.  Sears Home Services also includes HVAC services, home improvement services (primarily siding, windows, cabinet refacing, kitchen remodeling, roofing, carpet and upholstery cleaning, air duct cleaning, and garage door installation and repair).  For more information about Sears Home Services, visit the website at www.searshomeservices.com.

NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE Sears Holdings Corporation

Girish Lakshman appointed president Fulfillment at Sears Holdings Corporation

HOFFMAN ESTATES, Ill., 2015-9-22 — /EPR Retail News/ — Sears Holdings Corporation (NASDAQ: SHLD) today announced the appointment of Girish Lakshman as president, Fulfillment. His new role will support the company’s continued efforts to enhance the member experience, flawlessly fulfill member and customers’ needs and advance its integrated retail strategy.

Lakshman most recently served as vice president of Worldwide Transportation Strategy, Technology and Customer Returns at Amazon. During his 15 years with Amazon, Lakshman held positions with increasing responsibility in a variety of roles in transportation, technology, logistics, operational excellence and management. Lakshman’s early career experiences included operations planning for manufacturing and industrial engineering functions.

“Girish’s strong operational discipline, process thinking and experience leading change make him a strong fit for Sears Holdings,” said Edward S. Lampert, Sears Holdings’ Chairman and Chief Executive Officer. “He will work closely with me and our supply chain and inventory management leaders to enhance our members’ experiences and support our transformation as an integrated retailer.”

Lakshman holds a Bachelor of Science degree in Mechanical and Industrial Engineering from Osmania University in India.

About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

NEWS MEDIA CONTACT:

Sears Holdings Public Relations
(847) 286-8371

SOURCE Sears Holdings Corporation

Sears Holdings: final tender results to purchase for cash up to $1,000,000,000 principal amount of its outstanding 6 5/8% Senior Secured Notes Due 2018

HOFFMAN ESTATES, Il., 2015-8-31 — /EPR Retail News/ — Sears Holdings Corporation (“we,” “us,” “our,” or the “Company”) (Nasdaq: SHLD) today announced the final tender results of its previously announced tender offer (the “Offer”) to purchase for cash up to $1,000,000,000 principal amount of its outstanding 6 5/8% Senior Secured Notes Due 2018 (the “Notes”).  As of 11:59 p.m., New York City time, on August 28, 2015 (the “Expiration Date”), approximately $936.2 million principal amount of the Notes were validly tendered and not validly withdrawn in the Offer, including approximately$0.6 million principal amount of the Notes that were validly tendered and not validly withdrawn after the early tender date of August 14, 2015 (the “Early Tender Date”) and at or prior to the Expiration Date.

The terms and conditions of the Offer are set forth in an Offer to Purchase (the “Offer to Purchase”) and related Letter of Transmittal (the “Letter of Transmittal”), each dated August 3, 2015.  Consummation of the Offer, and payment for the tendered Notes, is subject to the satisfaction or waiver of certain conditions described in the Offer to Purchase.

Subject to the terms and conditions of the Offer, the Company expects that it will accept for purchase all of the Notes validly tendered and not validly withdrawn pursuant to the Offer at or prior to the Expiration Date and not previously accepted for purchase.

Holders who validly tendered and did not validly withdraw Notes at or prior to the Early Tender Date received the “Total Consideration” of $990 per $1,000 principal amount of Notes that were accepted for purchase, which included an early tender payment of $30 per $1,000 principal amount of Notes accepted for purchase, plus accrued and unpaid interest up to, but excluding, the settlement date.  Holders who validly tendered and did not validly withdraw Notes after the Early Tender Date but at or prior to the Expiration Date will receive the “Tender Offer Consideration” of $960 per $1,000principal amount of Notes accepted for purchase, plus accrued and unpaid interest up to, but excluding, the settlement date.

The settlement for those Notes validly tendered and not validly withdrawn after the Early Tender Date, and at or prior to the Expiration Date, and accepted by the Company is currently expected to be Monday, August 31, 2015.  Notes tendered pursuant to the Offers may no longer be withdrawn, unless otherwise required by law.

Jefferies LLC (the “Dealer Manager”) is serving as Dealer Manager for the Offer.  Questions regarding the Offer may be directed to the Dealer Manager at (877) 877-0696 (toll free) or (212) 284-2435 (collect).  Requests for the Offer to Purchase or the Letter of Transmittal or the documents incorporated by reference therein may be directed to D.F. King & Co., Inc., which is acting as the Tender Agent and Information Agent (“Tender and Information Agent”) for the Offer, at the following telephone numbers: banks and brokers, (212) 269-5550; all others, toll free at (800) 330-5136.  Offer materials are available at the following Web site address:  www.dfking.com/sears.

This press release is neither an offer to purchase nor a solicitation of an offer to sell securities.  No offer, solicitation, purchase or sale will be made in any jurisdiction in which such offer, solicitation, or sale would be unlawful.  The Offer was made solely pursuant to the terms and conditions set forth in the Offer to Purchase and the Letter of Transmittal.  None of the Company, the Company’s Board of Directors, the Dealer Manager, the Tender and Information Agent, the trustee under the indenture governing the Notes or any of their respective affiliates has made any recommendation as to whether holders should tender their Notes.

Forward-Looking Statements

This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the Offer, the terms of the Offer, the dates on which actions relating to the Offer are expected to occur and other statements that describe the Company’s plans.  Whenever used, words such as “will,” “expect,” and other terms of similar meaning are intended to identify such forward-looking statements.  Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company’s control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.  These include, but are not limited to, risks and uncertainties relating to the Offer, such as the operational and financial profile of the Company or any of its businesses after giving effect to it.  Detailed descriptions of other risks relating to the Company are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.  While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially.  We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.

About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.

MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE Sears Holdings