Summary of Sears Holdings Corporation 2011 Quarter Report
On Thursday, May 19, 2011 Sears Holdings Corporation (SHLD) announced its 2011 first quarter results in a press release on their website. The results were very disappointing, specifically for investors, as Sears, who also owns Kmart, reported an overall $170 million in net losses for the American based corporation and $49.5 million in losses for Sears Canada (Sears Holdings Press Releases, 2011). Lou D’Ambrosio, Sears Holdings’ CEO and President, stated the losses were due to the unseasonable weather, the economic recession in which consumers are not spending their money, and the past offering of the government-sponsored stimulus program to encourage consumers to purchase energy efficient appliances (Cash for Appliances). However, he did state that Sears Holdings failed to “execute with excellence,” meaning they did not execute and leverage their assets as well as they could have. Something investors do not want to hear. In the press release, D’Ambrosio outlined their strategy to get back on track by, “…extending [their] leadership position in appliances, capitalizing on the scope of [their] portfolio and marquee brands such as Kenmore, Craftsman, DieHard, and Lands' End, extending [their] lead in home services, revitalizing Sears' apparel business and delivering an extraordinary customer experience at the store, online and in home.” http://www.searsholdings.com/pubrel/pressOne.jsp?id=s16310_item39379
Analysis of/Reaction to Sears Holdings Corporation 2011 Quarter Report
Sears Holdings communicated their message well. Their press release could be seen on wire services, such as PRNewswire, and also Sears Holdings’ website, including on the “Investor” tab of the website, on May 19th. The press release was very descriptive, although it was difficult for the average consumer to understand. This report was not mentioned as much in the media as I thought it may have been, but the majority of the sources that did cover it, only restated what Sears Holdings already stated in their press release. This is a great example of how Sears Holdings was successfully able to control their message. In February of 2011, Sears Holdings announced a new CEO, Lou D’Ambrosio, to take lead and in October 2008, a new CFO was announced. In all the media, there was no mention of these new changes relating to the quarter reports. The only negative comment found was from Dave Kansas, of the Wall Street Journal, who stated that Sears Holdings’ excuse of unseasonable weather was a stretch. As he mentioned, “[f]unny how winter comes around every year” (Kansas, 2011). The communication prior to the press release was slim, from a public’s standpoint. Sears Holdings did, however, forewarn investors that business was below the predicted expectations. Although, nothing has been said since the release of the report, which is not to say that Sears Holdings has not been communicating with investors, they just may not have been communicating publicly. SHLD and Social Media Sears Holdings Corporation does not have a presence, itself, on social media platforms, however, Sears and Kmart do individually. Neither made any comments relating to the quarter report on Facebook, Twitter or YouTube, as their primary focus for social media is consumer based, where they promote new products and store offerings/sales, and engage in active conversation with consumers. I feel it would not be appropriate for Sears Holdings to be active in social media, nor do I feel it’s appropriate to discuss something of this nature on a social media platform, regardless of the corporation. When dealing with investor relations, I feel traditional methods are best to use. http://www.facebook.com/sears SHLD Communication Critique In order to communicate to consumers, Sears Holdings could have written the press release to relate to more than just the investors. Using terms that are spoken by only investors and the corporation, leave out other interested publics. A second explanation written for the consumer could have complimented the report for the investors. Also, by not communicating to the public after the release, could allow media, consumers, etc. to talk and make assumptions. D’Ambrosio would be wise to put out another press release or host a press conference to discuss exactly how Sears Holdings plans to implement the strategies he laid out in the report. Overall, Sears Holdings Corporation did a good job dealing with, and communicating to, their investors on such a difficult issue. |
