Customers who abandoned Sears Holdings in favor of shopping online and other discount retailers have returned for its liquidation sales.
For the first time in years, the 125-year-old retailer, which filed for bankruptcy in October, saw quarterly same-store sales grow, according to company filings. The gain was attributed to a jump in customers lured by liquidation sales at closing stores. Sears closed 28 Kmart locations and 73 domestic Sears stores during the quarter that ended Nov. 3.
Sears saw same-store sales increase by 3.2 percent in the third quarter from the previous year, as customers shopped for deals on apparel, jewelry, footwear and tools. Sales at stores open at least a year dropped for its home appliances business and auto centers, as the value of the bankrupt company's product warranties declines, given Sears' uncertain future.
Kmart's same-store sales increased by 6.1 percent, as customers bought apparel, home goods and toys. Shoppers were less interested in buying its groceries and household products or filling prescriptions at Kmart pharmacies.
Total revenue for the third quarter dropped to $2.74 billion, down 23.6 percent from $3.53 billion last year. The company attributed the decline to fewer stores operating, which accounted for $741 million lost in sales. Customers using points from the retailer's rewards program accounted for $49 million of the revenue decline.
In November, the retailer won court approval for $350 million in bankruptcy financing. The money will allow it to keep operating through the holidays as it tries to reorganize. Chairman Eddie Lampert's hedge fund ESL Holdings has submitted a $4.6 billion offer to buy the company.