Sears Holdings to Further Cut Benefits
Hoffman Estates, Ill., In the wake of soaring costs and plummeting shares, Sears Holding Corp. announced that retirees under the age of 65 will be forced to pay for their own health care coverage. Sears said that retiree health care costs consist of 17% of the company’s operating income.
Sears shares are down 29% from an all-time high of $163.50, set in July. Sears representatives say cutting costs is necessary to stay competitive, adding that Sears remains one of the only major U.S. retailers that provides retiree health care coverage: “Our new plan continues to be more generous than most," spokesman Chris Brathwaite said.
Sears said that because of accounting rules related to its acquisition of Kmart it no longer expects to record gains from post-retirement benefits in future years.