SEARS
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Stock Analyst Sozzi:
Sears Could Disappear By 2017
Monday,
13 Jan 2014 11:03 AM
By Dan Weil
Sears
may go out of business by 2017, Brian Sozzi, CEO and chief equity analyst of
stock research firm Belus Capital Advisors, concluded after an extremely
negative earnings forecast from the retailer Thursday.
It predicted an adjusted loss of $811 million to $914 million for all of 2013.
"We got a dose of reality check from Sears," Sozzi told Yahoo, adding that the "company is in absolute crisis."
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"All the years of mass underinvestment. When you cut your capex by 50 to 60 percent in the third quarter year-to-date, you're going to see the negative sales you saw from Sears and Kmart, and it came home to roost."
Sears has liquidity issues, Sozzi says. "If they don't sell assets now, they could run out of money by holiday 2015."
The retailer isn't investing in its name brands, which would enable it to entice customers back to its stores, Sozzi says. And there's nothing it can do to recover now, he says.
"I view Sears in a slow death spiral. I originally viewed by 2020 that this company may not be in business. After that report [Thursday] night, I move that target up to 2017 to 2018."
Investors clearly didn't think too highly of Sears' forecast either, pushing its shares down 14 percent Friday.
"The [earnings] numbers are atrocious," Mary Ross Gilbert, an analyst at Imperial Capital, told Bloomberg. "A lot of apparel retailers were challenged in the [fourth] quarter. And those that executed well were able to come out ok."
Editor’s Note: These 38 Investments Have a 96% Win Rate
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It predicted an adjusted loss of $811 million to $914 million for all of 2013.
"We got a dose of reality check from Sears," Sozzi told Yahoo, adding that the "company is in absolute crisis."
Editor’s Note: These 38 Investments Have a 96% Win Rate
"All the years of mass underinvestment. When you cut your capex by 50 to 60 percent in the third quarter year-to-date, you're going to see the negative sales you saw from Sears and Kmart, and it came home to roost."
Sears has liquidity issues, Sozzi says. "If they don't sell assets now, they could run out of money by holiday 2015."
The retailer isn't investing in its name brands, which would enable it to entice customers back to its stores, Sozzi says. And there's nothing it can do to recover now, he says.
"I view Sears in a slow death spiral. I originally viewed by 2020 that this company may not be in business. After that report [Thursday] night, I move that target up to 2017 to 2018."
Investors clearly didn't think too highly of Sears' forecast either, pushing its shares down 14 percent Friday.
"The [earnings] numbers are atrocious," Mary Ross Gilbert, an analyst at Imperial Capital, told Bloomberg. "A lot of apparel retailers were challenged in the [fourth] quarter. And those that executed well were able to come out ok."
Editor’s Note: These 38 Investments Have a 96% Win Rate
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Read Latest Breaking News from Newsmax.com http://www.moneynews.com/InvestingAnalysis/Sozzi-Sears-2017-earnings/2014/01/13/id/546758#ixzz2qJzM91WT
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