Sears takes hit as value of name drops
Sears Holdings (NASDAQ:SHLD) said Thursday it will once again book a charge to account for the declining value of its trade name.
The struggling department-store chain has marked down the value of the Sears name and its other brands for three consecutive years. The charge for fiscal 2017 will be $50 million to $100 million. Last year, Sears took a $381 million write-down.
The accounting move records a decline in the estimated value of Sears’s name, shopper loyalty and other items, including other corporate brands such as Kenmore appliances. Companies must evaluate the value of their assets each year, posting impairment charges if necessary.
The Sears brand has taken a hit as the Hoffman Estates, Illinois-based company wrestles with declining sales. Sears expects to report another loss in revenue for the fourth quarter. In preliminary results disclosed Thursday, Sears said sales are estimated to fall to $4.4 billion, down from $6.1 billion in the fourth quarter of the prior year. But tax reform will help Sears post a quarterly profit of $140 million to $240 million, as changes in the federal tax code provided an on-paper benefit of up to $495 million.
Sears has closed hundreds of stores, spun off real estate and put some of its assets on the sales block in order to turn its fortunes around. Last year, Sears sold Craftsman to Stanley Black & Decker (NYSE:SWK), and Sears has said it will consider alternatives for other businesses.
The retailer has also begun offering Kenmore and DieHard products on Amazon (NASDAQ:AMZN) to boost sales.