Sears Shares Slip Ahead of Holidays

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Shares of Sears Holdings Corp. (NASDAQ: SHLD), which owns Kmart and Sears, have dropped ahead of the holiday. As it the case with most troubled retailers, it needs overall consumer buying over the holidays to move higher so that it can benefit from the national trend in improving retail traffic.

Sears Holdings’ shares have fallen 7% in the past month and are down 45% over the past year. Among the major concerns about the company is that competition will come from other retailers, as always, but particularly troubled competition, which includes J.C. Penney Co. Inc. (NYSE: JCP), Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT). Investors will abandon their shares if each cannot prove that its difficult prospects can be improved. Sears is the weakest among these.

Sears also operates in an environment in which all major marketing tricks have been exhausted. Every retailer offers some form of free shipping. Even successful retailers offer special discounts to help them maintain healthy market shares. And the press toward e-commerce has taken on extra urgency as Amazon.com Inc.’s (NASDAQ: AMZN) success becomes more overwhelming. The e-commerce company recently posted a revenue increase of 23% to $25.3 billion. And Amazon has special leverage because of its Prime program, which offers special prices on items, free shipping and streaming video bundled into one service. No other retailer has a program to match it.

Sears has a program of its own:

Sears announced it will feature major holiday savings events throughout November, including an opportunity for its members to snag select Black Friday deals early.

“The holiday shopping season is officially underway and if you’re an early-season shopper, you’re going to like what you find in every department at Sears,” said Joelle Maher, President and Chief Member Officer for Sears. “We’re offering our members some incredible opportunities to benefit from traditional Black Friday deals throughout the month of November.”

“Members” will not solve the problems at Sears.

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