Sears, Kmart closings: Shares slide to new low on Fitch downgrade
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Sears Holding Corp. is ending the year on a bitter note. The company, which earlier this week posted a list of 79 out of the up to 120 Sears and Kmart stores it plans to close and was then downgraded by Fitch Ratings, is now watching its stock bleed out to a new low.
In mid-day trading in New York, the beleaguered retailer’s stock was down to $32.20, heading for its fourth straight daily drop and less than half of the year-earlier price of $74.15.
Fitch Ratings downgraded the company on Thursday to CCC from B, saying that Sears’ liquidity levels next year will likely be “inadequate,” which could potentially banish the retailer into restructuring.
And Standard & Poor’s said Wednesday that it was putting a watch on Sears’ credit rating as it considers a possible downgrade for the retailer.
Illinois-based Sears said Thursday that it will close 41 Sears stores and 38 Kmart stores – the first thrust of a plan to shut down 100 to 120 locations, including three in California -- following a disappointing holiday season.
Domestic sales tumbled 5.2% in the eight weeks through Christmas Day, the company said Tuesday. That comes after more than four years of sliding sales and projections that fourth-quarter earnings will be less than half the $933 million Sears pulled in during the same period a year earlier.
The company said it will now focus its resources on its strongest stores.
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-- Tiffany Hsu
