The continued shift to online shopping is taking its toll at Sears Hometown and Outlet stores, with the retailer reporting a 4.9% drop in in-store sales in the second quarter.
The seller of household appliances, tools and garden equipment has been battling in the wake of competitors who have sharply cut back on similar items. But a less than optimal online experience also reduced the company’s bottom line.
âBuyers are increasingly choosing to buy products directly online in our key product categories, as evidenced by our key competitors who continue to report significant gains in online sales,â said Will Powell, CEO and president of the company, in a press release.
But the retailer, which split from Sears Holdings in 2012, made changes to its separation agreements last spring. The amended agreements will allow for the creation of online platforms for Hometown, part of a larger online overhaul. âWe are currently on track to launch the new websites in the fourth quarter of 2016, a quarter earlier than our original plan,â said Powell. âWe believe this will improve the long-term competitive position of the company.
Sears Hometown sells nationally branded products ranging from garden equipment to home appliances. The Outlet component of the company sells discontinued, overstocked, or slightly damaged versions of these items, as well as sporting goods, mattresses and clothing, at a great price. While stores open at least a year saw a nearly 5% drop in sales, the company’s profit reached $ 10.6 million in the second quarter, from a loss of $ 405 million in the last quarter. the same three month period last year. This was largely the result of the sale of assets by the retailer and the reduction in administrative costs.
Additionally, an effort to get rid of underperforming stores led to the closure of 22 locations in the quarter ending July. There were no new openings. It also contributed to a 10.2% drop in net sales, to $ 556.4 million.