Investors just got another sign that Sears is doomed


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Investors just got another sign that Sears Holdings' third quarter results could be particularly dismal.


Lands' End, a brand that's sold primarily in Sears' stores, reported a 14.3% drop in same-store sales in the third quarter.

The company blamed slowing shopper traffic at Sears for the drop.

"We ended the quarter with 219 shops at Sears and have continued to see weak traffic trends within malls and more specifically within our Sears locations," Lands' End Chief Financial Officer Jim Gooch said on an earnings call.

That's a troubling sign for Sears, which reports third-quarter earnings on Thursday, because Lands' End has tended to outperform Sears in same-store sales since it was spun off from the department-store chain in 2014.


Lands' End's same-store sales fell 9.3% last year, compared to an 11.1% drop at Sears stores.

In another ominous indicator for Sears, the company just lost two of its top executives last week.

And Sears Hometown and Outlet Stores, which was spun off from Sears Holdings in 2012 but continues to sell Sears merchandise, also reported dismal quarterly results.

The company said last week that net losses in the third quarter widened from $5.5 million last year to $93.2 million this year.

The losses were driven in part by a 49% drop in apparel sales. The company blamed Sears Holdings for the precipitous drop in apparel sales, citing the "continuing impact of significantly reduced inventory availability from Sears Holdings, our sole source for this category."

"We do not expect inventory availability to improve and, as a consequence, we plan to continue to de-emphasize, and eventually exit, this category," Sears Hometown and Outlets said.


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