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3 ugly secrets Sears is keeping from the world

Breakout Staff
Breakout

Editor's Note: The following is a guest post from Yahoo Finance guest contributor Brian Sozzi. He is the CEO & Chief Equities Strategist of Belus Capital Advisors.

I have a fun and quick exercise for you to do. Close your eyes and try remembering the last time you visited a Sears or Kmart store. Exactly. If you to happen to recollect, imagine your experience while walking the aisles. Exactly.

Without question, Sears Holding Corp. (SHLD) had a brutal year in 2013 even as the U.S. jobs market greatly improved. The company lost a staggering $1.4 billion as it decided to fade further from the minds, and wallets, of consumers via mass store closures, and a strategy of not keeping must haves, such as food and electronics, in stock.

However, despite the financial bloodletting, Sears’ Chairman & CEO Eddie Lampert issued another generally happy face annual letter to shareholder’s, trumpeting the company’s ongoing transformation into a mash-up retailer called #WalMazon. In case you missed it, a Walmazon retailer is great at selling stuff online and in stores.

Time to get real. Here are three secrets I discovered from Sears’ latest financials:

  1. Capital expenditures fell a disturbing 13% in 2013 versus 2012, and were at the lowest $$$ amount in over five years. Note: a normal percentage for a Walmart (WMT), a Macy’s (M), or any retailer seeking to stay relevant is north of 2%. Yep.

  2. Sears and Kmart same-store sales declined 5.1% and 7.8%, respectively, in the fourth quarter. Walmart U.S. sales fell 0.4%. Target’s (TGT) sales declined 2.5%, following its major data breach. Woah.

  3. In 2013, Sears closed a total of 113 stores to raise cash via liquidation events. Since January 2014, Sears store closures have been sweeping the country unannounced. Given that topic a Yahoo keyword search on your mobile device.

You are very welcome for the Sears decoding sesh.

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