(99 Percent) Profit Plunge Slams Sears

The Street.com ^ | November 29, 2007 | Nat Worden

[Zakeet]

Shares of Sears Holdings dropped below the $100 mark on Thursday for the first time in their two-and-a-half year existence after the company reported disastrous third-quarter results that suggest its days as a retailer could be numbered.

Fans of the company's chairman, Greenwich, Conn., hedge fund manager Ed Lampert, say that Sears may be a dying retailer, but it's cash can be invested elsewhere by a value-investing genius. Others say the path to riches at Sears lies in the hidden value of its real estate, which guarantees upside in the stock -- even in the event of a liquidation.

With shares of Sears down nearly 50% from their April all-time highs, such convictions are looking increasingly precarious as the U.S. housing bust threatens to plunge the economy into a recession. The company's cash flow is dwindling as its profitability sinks, and real estate values are mired in a cloud of uncertainty.

[RightWhale]

Craftsman tools are the same as the rest except the lifetime guarantee. They are real tools of course unlike that Chinese cr#p that only looks like tools until you try to use it.

[giotto]

Sears is an anachronism.

I gave up on Sears the second time they screwed up an online order. Both times, I ordered something and arranged to pick it up at a local store. Both times, instead of walking out with the item I had paid for, I ended up sitting around waiting for 45 minutes, only to be told that they didn't have what I had purchased. Too bad, because they do have very good appliances. I hope they can survive somehow.

[MarineBrat]

Thanks for the tip! I tend to avoid Home Depot, but I do frequent Lowes and the Kobalt tools have caught my eye. If Sears goes bust I may move my loyalty in that direction. I had always considered Snap-On to be the highest quality hand tool available (to the masses), and I own several Shap-On items, but since I have not worked as a professional mechanic since the early 1980's I just don't have the opportunity to buy them. If I could just talk a Snap-On truck into driving down my street like the ice cream truck does every day... :)

I actually carried a broken Snap-On 1/4" ratchet around in my glove box for about ten years until one day I happened upon a Snap-On truck at a Chevy dealer who replaced it for me. (Though he gave me a hard time about it because I wasn't his customer -- why I do like the Sears attitude about the whole thing.)

If Sears dies and Orchard Supply keeps selling Craftsman hand tools, and honoring their warranty, I'll probably go there instead.

[aroundabout]

It’s hard to believe they feel the customer doesn’t count. After all they would fail without customers. They may be doing a lousy job with the customer if the 99% profit drop is accurate but I’m sure they do care about their customers.

[aroundabout]

Agreed. Tools also can be a good buy if you shop carefully.

[aroundabout]

Whatever the reason, If I can save money at Sears or anywhere else on similar items, I go where the price is best. The only thing I won’t do is buy large items like Refrig., washers, dryers, etc from a strictly on line retailer.

[jalisco555]

They have a good tire and auto center.

I was one of the people in New Jersey who paid for Sears auto service that wasn't performed. I realized this when the headlight I paid to replace wasn't. Big scandal a while back. I used to take my car there for regular oil changes and I've often wondered if the engine problems at 80k miles was due to the oil never really being changed.

[Crolis]

While it was before online ordering took off, I remember another now defunct chain called Service Merchandise. They had a precursor to online ordering where you could just use an in-store computer (they called it Silent Sam I think) to purchase from a printed catalog.

The stuff on the floor was just a subset of what they had in storage. Then you’d spend a little more time browsing until they had picked your item and placed it on a conveyor at the checkout location.

I miss that store because they usually had good prices on scientific calculators, especially the HP 48 series. I still use my HP 48GX from time to time. It’s amazing it’s been more than 10 years since I bought it.

If I recall correctly, Bill Cosby did some television/print ads for Service Merchandise.