Sears Holdings (NASDAQOTH:SHLDQ) hasn't exactly performed well lately. Shares are down by 83% over the past year, and after a sharp decline yesterday, they're falling again today. As of 11:30 a.m. EDT, Sears is down by more than 7% and has reached a new 52-week low.
Yesterday's drop can be attributed to the news that Sears received an offer to sell off its Kenmore brand from its CEO for as much as $480 million in cash. While this would certainly help alleviate some of Sears' debt and liquidity concerns, it likely won't be enough to make significant progress in terms of long-term financial stability.
The reason for today's tumble? It isn't because of anything specifically to do with Sears. Instead, it's due to weak results from its closest peers and strong results from the wrong competitor.
Fellow struggling department store chain J.C. Penney (NYSE:JCP) reported earnings that missed expectations on both the top and bottom lines, and also reduced its outlook for the rest of the fiscal year. And, generally speaking, when one department store is doing poorly, that's a bad sign for the others.
On the other hand, massive discount retailer Walmart (NYSE:WMT) posted a fantastic second quarter, including excellent apparel sales and a 40% year-over-year surge in e-commerce. Walmart is a business that has taken revenue away from full-price competitors like department stores, so rising sales for Walmart could be interpreted as bad news for Sears.
The price action over the past few days appears to be investors saying that there's little hope for Sears going forward. The potential sale of the Kenmore brand is likely too little, too late, and the recent results from peers are reminding investors that Sears' business model may not have a future in the new retail landscape.