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Friday 25 august 2017 BUSINESS
A24

Sears to close more stores; sales fall in 2Q A puzzle for central bankers:

By A. D’INNOCENZIO keep Sears afloat, has long been sprucing up their Solid growth but low inflation
DAMIAN TROISE pledged to turn the com- stores. J.C. Penney has
AP Business Writers pany’s fortunes around brought back to its floors By M. CRUTSINGER certainly timely. Though
NEW YORK (AP) — Sears and that the retailer would major appliances more AP Economics Writer the global economy ap-
continued to struggle in its find ways capitalize on its than 30 years after aban- JACKSON HOLE, Wyo- pears more stable than
second quarter with de- best-known brands like doning the sale of refrig- ming (AP) — Against a at any other point in the
clining sales amid height- Kenmore appliances and erators and stoves. And backdrop of strengthen- past decade, growth
ened competition from the DieHard car batteries, as Walmart announced ear- ing growth but chroni- since the 2008-2009 reces-
likes of Walmart to Ama- well as its vast holdings of lier this week that it was cally low inflation, Fed- sion has remained slug-
zon. It now says it will close land. joining forces with Google eral Reserve Chair Janet gish in the United States
even more stores. Last month, it began selling to offer hundreds of thou- Yellen and other central and most other industrial
The Hoffman Estates, Illinois its appliances on Amazon. sands of items for voice bankers are taking their countries. One conse-
retailer, which operates com, including Kenmore shopping through Google measure of the global quence is that discontent
Sears and Kmart stores, has smart appliances that can Assistant as it tries to chal- economy at their annual has grown among groups
conference in the shad- that feel left behind, hav-
ow of Wyoming’s Grand ing helped fuel Donald
Teton Mountains. Trump’s election victory
With the prospect of new and Britain’s vote to exit
leadership at the Fed the European Union.
within months, investors The stated topic of Yel-
will be listening for any len’s speech Friday will be
hint of shifting interest rate financial stability, which
plans from the policymak- may provide a platform
ers. The most watched to address concerns
events will come Friday, that the Fed’s ultra-low
when Yellen and Mario rates have fueled asset
Draghi, head of the Eu- bubbles in the stock mar-
ropean Central Bank, will ket. Many Fed officials,
each address the confer- including Yellen, have
ence. said in the past that they
Though a surprise an- do not think asset prices
nouncement can’t be have reached danger-
ruled out, most analysts ous heights. The Fed has
expect no major poli- raised its key policy rate
cy changes to be an- twice this year, in March
nounced by either leader. and June. It’s still signaling
Still, central bankers go- that it plans to raise rates
This Wednesday, March 22, 2017, photo shows a Sears sign outside the department store at the Tri- ing back to Alan Greens- a third time before year’s
County Mall, in Springdale, Ohio. Sears Holdings Corp. reports earnings, Thursday, Aug. 24, 2017. pan’s appearances in the end and to begin par-
(AP Photo/John Minchillo) 1980’s have sometimes ing its bond portfolio — a
used the annual confer- move that could increase
been trying to cut costs by be synced with Amazon’s lenge Amazon’s Alexa-
closing stores, including voice assistant, Alexa. The powered Echo devices. ence to send messages rates on mortgages and
180 this year and already announcement that day While Sears said in a pre- to the financial markets. some other loans.
had plans to cut another sent shares of Sears soar- recorded transcript that Yellen’s predecessor, Ben Many analysts say they
150 stores. It now plans to ing. it was seeing “significant Bernanke, signaled a new think the Fed will keep
shutter an additional 28 But Sears is battling chal- progress” in its transforma- round of Fed bond pur- raising rates at only a very
Kmart stores. lenges on all fronts. Like tion, analysts see a differ- chases in 2010 to try to gradual pace until it’s
“The retail environment many department stores, ent picture. invigorate a weak U.S. confident that a recent
remained challenging,” Sears is feeling pain as “As much as Sears de- recovery. And last year, puzzling slowdown in in-
Sears Holdings Corp. said shoppers change their serves credit for the various Yellen let markets know flation reflects temporary
in a statement. preferences and behavior. actions it has been taking that more rate hikes were factors and will reverse
The company reported They’re spending more on- to shore up the company, coming. The Jackson course as low unemploy-
Thursday that its second- line and spending less on there is no denying that Hole conference, spon- ment starts boosting wag-
quarter loss narrowed to clothing and more on ex- this is a miserable set of sored by the Federal Re- es and spending. Inflation
$251 million, or $2.34 per periences like spas. But an- numbers,” wrote Neil Saun- serve Bank of Kansas City, has been running below
share. Losses, adjusted for alysts say Sears has much ders, managing director is in its 41st year. the Fed’s 2 percent tar-
one-time gains and costs, to blame for its woes. While of GlobalData Retail in a The conference occurs as get for five years. Chroni-
came to $1.16 per share. Sears has ramped up on- report published Thursday. the Fed is in the midst of cally low inflation can de-
Revenue fell 23 percent to line services, it’s having “Indeed, the precipitous gradually and modestly press economic growth
$4.37 billion in the period. a hard time disguising its drop in comparable sales raising its benchmark rate because consumers typi-
Sales at stores open at least age. Stores are in need of and the continued lack of to reflect a strengthened cally delay purchases
a year, a key measure of a a major redo. progress on profit suggests U.S. economy. By con- when they think prices will
retailer’s health, dropped And old rivals have made the company isn’t moving trast, the ECB is still buying stay the same or even de-
11.5 percent. At Kmart, the it tougher as they aim to far or fast enough to en- bonds to keep keeping cline.
measure dropped 9.4 per- compete with online lead- sure its long-term survival.” rates at ultra-low levels On Friday, Yellen could
cent, while at Sears stores, er Amzon.com, which is In March, Sears said there but may be preparing to offer guidance on what
that figure was down 13.2 pushing ahead with inno- is “substantial doubt” it slowly taper its purchases the Fed might announce
percent. vative services as part of its could continue as a viable next year. at its next meeting, Sept.
Chairman and CEO Ed- juggernaut Amazon Prime concern, with intense pres- The official theme of this 19-20, about its key short-
ward Lampert, whose membership. sure coming from compa- year’s conference — term rate or about the ex-
hedge fund has forward- A number of chains like nies like Wal-Mart, Target “Fostering a Dynamic pected start of its parings
ed millions in funding to Walmart and Target have and Amazon.com.q Global Economy” — is of its bond portfolio.q