To Our Associates:
Today, Sears Holdings announced our financial results for the fourth quarter and full year of 2017.
I am pleased to report that, despite a decline in sales, we delivered a significant improvement in Adjusted EBITDA, which is a key indicator of our efforts to return our company to profitability. This marks the third consecutive quarter of year-over-year progress in Adjusted EBITDA, reflecting the hard work of our associates and the strategic actions we have taken.
Looking back on 2017, we are proud of the progress we have made toward our transformation, including the following highlights:
- Significantly Expanded the Shop Your Way Ecosystem – We continued to expand our Shop Your Way platform through a broad range of strategic partnerships and new offerings, all with the aim of providing our members with unparalleled service options and money-saving benefits. This relentless focus on our members helped them earn hundreds of millions of dollars in Shop Your Way Points in the past year alone. We further expanded and enhanced Shop Your Way in fiscal 2017 by:
- Launching the new Sears Mastercard in partnership with Citi Retail Services, featuring an industry-leading 5-3-2-1 rewards offer that enables members to earn Shop Your Way points on all purchases everywhere they shop, especially 5% in points for gasoline and 3% in points for groceries and dining;
- Partnering with Meredith Corp. (the former Time Inc./Synapse) to provide our members access to over 300 magazines, with the full subscription price awarded back in Shop Your Way points, making the magazines effectively free; and
- Expanding our Shop Your Way collaboration with Uber to reward both drivers and passengers.
- Continuing to Support Puerto Rico’s Recovery – We should all be proud of our extraordinary efforts to support and serve our members in the communities impacted by hurricanes Harvey, Irma and Maria last year. In particular, Sears Holdings’ thousands of dedicated associates in Puerto Rico, St. Thomas and St. Croix worked to quickly restore their retail operations in the wake of Hurricane Maria, providing fuel, power, internet access, water, food, vaccines and other essential goods to their communities. By enabling our company to engage directly with our members, Shop Your Way helped us collect and distribute over $12 million to local communities and charities. Sears Holdings remains fully committed to helping these communities recover and rebuild, as seen in our recent holiday toy drive in partnership with Major League Baseball star Rene Rivera.
- Unleashed the Power of Our Brands Through Partnership With Amazon – In 2017, we entered an innovative, game-changing partnership with Amazon to launch two of our iconic brands – Kenmore and DieHard – on Amazon.com. This exciting collaboration will expand the reach of the Kenmore and DieHard brands to the millions of Americans who shop on Amazon.com every day, while ensuring Sears Holdings will continue to participate in the brands’ future growth.
- Opened Innovative New Store Formats – This year, we built on the success of the smaller-format stores we opened in 2016 by opening several innovative new store formats across the U.S. that highlight the power of our company’s integrated retail capabilities. The Sears Appliance & Mattress stores in Texas, Pennsylvania and Hawaii showcase two of our strongest categories, while blurring the lines between the traditional brick-and-mortar and online shopping experiences. In addition, our new DieHard Auto Centers in Texas and Michigan combine state-of-the-art technology with service from our experienced associates to meet the ever-changing needs of today’s drivers.
While we should all welcome the positive trend established over the last few quarters, we must continue to work hard to carry this level of improvement forward into 2018. To make our company a more competitive retailer in a very challenging environment, we will need to remain focused on our Best Members, Best Categories and Best Stores – which will be key to driving improvements in sales and profitability.
We will also continue to evaluate options to support our ongoing business operations, including the series of financial transactions we recently announced that will help to further strengthen our company’s financial position.
Thank you for all your ongoing contributions and hard work. We are encouraged by the progress we are seeing and remain committed to our strategy to restore Sears Holdings to profitability so we can continue to serve our members for years to come. All of you will play an important role in helping us redefine the way we work to deliver our best products and services to our members.
Edward S. Lampert
Cautionary Statement Regarding Forward-Looking Statements: Certain statements contained in this post contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that use words and phrases such as the company “anticipates,” “believes,” “continue,” “expects,” “intends,” “plans,” “transform,” “going to be” and similar expressions or future or conditional verbs such as “will,” “may,” and “could” are generally forward-looking in nature and not historical facts and are intended to identify forward-looking statements. Forward-looking statements are subject to various risks, assumptions and uncertainties, including risks, uncertainties and factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.