I keep seeing post about how associates think thier stores are profitable. Doubt it. Unless your store Manager has took you through EIS and broke down your numbers to prove you are profitable. ..then I doubt it. There are very few stores in the green. Majority of the stores barely break even, most are negative EBITA. Which means you do not contribute anything to our company. Your stores cost us.
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@1kxu Interesting (and sad). It's probably been too long, but I'd be curious if you remember what any of them were, so we could see if any of those have gotten closed already too.
When I left in July of 2017 there were exactly 32 "profitable" Sears stores. Let that sink in.
The profitable stores are all just about gone. Why? Well, let's see: it has a lot to do with location. A profitable store is almost always in a good location sitting on prime, marketable real estate. What was Eddie's intention all along? To sell the assets piece by piece. That included the choice real estate occupied by those profitable stores. Just about all of the best- and better-performing stores had been taken offline and so what's left are mostly the stores that are not as profitable, stores that would sit forever on the market if they were to be closed and stores that are leased. They are being kept alive long enough for Eddie's hedge fund to be able to buy some of the intellectual property (Kenmore, DieHard, maybe Shop Your Way and Home Services) and then it's game over.
As for the few profitable stores left over in the portfolio, it doesn't matter if they stepped up their game and had blisteringly high profit margins, increased volume and higher net income. Those stores are in the minority and there's nothing those stores could do to alleviate the mess that Sears Holdings is in, because the majority of stores combined with the countless sources of cash burn at all levels of the company will cancel out all of those efforts.
The statement that Eddie made about needing to make some material progress is true, because ALL the stores would have to increase their cash flow and profitability significantly and EVERY SINGLE business unit from Hoffman down to each individual department in each individual store (and everything in between) would have to face drastic changes to slow the bleeding just to even be close to having head above water. There would have to be one hell of a marketing plan and a prayer to God that there is enough volume in the thick of 4th quarter to offset the razor thin margins on discounted merchandise during the holidays.
It's not looking so good to me.
EBITDA is just another group of numbers and not recognized by GAAP. It does not reflect profitability. It reflects earnings before expenses. That's why only the corporate guys know if your store is profitable. They have to crunch all the numbers after E as well as some others to figure out if you are profitable. It is not done or known at the store level. You also need to realize that a lot of the Sears Holdings losses and debt are allocated to the individual stores which further erodes any prospect of profitability. Your SGM does not have axcess to all these other numbers so he doesn't know if you are profitable or not. The way we are burning through cash it's not going to make any difference anyway. It's simple economics. Oh, and by the way, we were supposedly a profitable store and we were just informed we are closing without any warning. So much for the SAFE store list. Bummer.
Less than a dozen stores in the entire North East are profitable.
Isn’t it EBITDA?
Doesn't matter how good the store is doing . The company is buried in debt .
It's entirely possible that individual stores are profitable. That doesn't alter the fact that Sears Holdings as a whole is losing an estimated $220 million a month with no end in sight.