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Direct Response Marketing

Sears Ad Budget Greatly Reduced

26 Aug, 2009 Response This Week


NEW YORK – Sears Holdings has experienced declining sales due to the recession and as a result, its advertising budget has continued to shrink, reports AdAge.com. 

The company’s ad budget was axed by $107 million in the first fiscal quarter, followed by a $45 million cut in Q2. The latter decline, however, included reductions at the Sears Canada division.

In the company’s fiscal second quarter, which ended Aug. 1, the company lost a total of $94 million compared to its net income of $65 million in the same period last year, according to MarketingDaily.

Sears domestic sales fell 10 percent to $10.6 million – including a 13-percent drop at Sears Roebuck & Co. stores and a 4-percent decline at Kmart stores. This is compared to the first quarter’s 12-percent and 2-percent drops, respectively.

The company is currently leveraging its position as a major retailer to secure better advertising deals. It’s also seeking to balance slowing sales with operating expenses.

“While the overall retail market remains difficult and its impact is reflected in our results, we continue to take actions to increase the efficiency of our operations,” said Sears Holdings interim CEO W. Bruce Johnson. “We have reduced our selling and general administrative expenses by approximately $1 billion over the past four quarters, including a reduction of $212 million this quarter.”


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