Economy & business

Once Iconic US Retailer Sears Unsure of Its Future

Sears, once the monolith of American retail, says that there is “substantial doubt” that it will be able to keep its doors open.


Company shares, which hit an all-time low last month, tumbled more than 12 percent Wednesday.


Sears has been a member of the retail dead pool for years, but until this week the company had not openly acknowledged its tenuous existence, said Ken Perkins, who heads the research firm Retail Metrics LLC.


Sears has long maintained that by balancing the sale of key assets while at the same time enticing customers with loyalty programs, it would eventually turn the corner.


Yet industry analysts have placed the staggering sums of money that Sears is losing beside the limited number of assets it has left to sell, and concluded that the storied retailer may have reached the point of no return.


The company has lost $10.4 billion since 2011, the last year that it made a profit. Excluding charges that can be listed as one-time events, the loss is $4.57 billion, Perkins says, but how the losses are stacked no longer seem to matter.


“They’re past the tipping point,” Perkins said. “This is a symbolic acknowledgement of the end of Sears of what we know it to be.”


For Sears to survive, Perkins believes it would need to do so as a company running maybe 200 stores. It now operates 1,430, a figure that has been vastly reduced in recent years.


Analysts see not much of a future

As for Kmart, which Sears also owns, Perkins does not see much of a future.  


Millions of dollars have been funneled through the hedge fund of Chairman and CEO Edward Lampert to keep Sears afloat but with sales fading, it is burning through cash. Lampert combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy


According to a regulatory filing late Tuesday, Sears Holdings Corp. lost more than $2 billion last year. Adjusted for one-time charges, its loss was $887 million.


Sears has been selling assets, most recently its Craftsman tool brand. But it says its pension agreements may prevent the spin-off of more businesses, potentially leading to a shortfall in funding.

“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears said in a filing with the Securities and Exchange Commission.


Sears, which employs 140,000 people, announced a major restructuring plan in February with hopes of cutting costs by $1 billion through the sale of more stores, jobs cuts and brand asset sales.  And it’s reconfiguring its debts to give itself more breathing room.

But it has to get more people through the doors or shopping online for what it’s selling.


Sales at Sears and Kmart locations that have been open at least a year, a key indicator of a retailer’s health, dropped 10.3 percent in the final quarter of 2016.


The company plans to use a big portion of the $900 million it got for Craftsman to shore up its pension plan. It will put $250 million in cash and some income from annual payments toward the plan as part of a deal with the Pension Benefit Guarantee Corp., a federal agency that protects private pension plans.


The company said in its regulatory filing, however, that its agreement with the agency might stand in the way of more asset sales that would buy it more time.


Lampert has long pledged to return Sears to greatness, leveraging best-known brands like Kenmore and DieHard, as well as its vast holdings of land.


Failing to reach new kind of consumer

Those aspirations have been scrambled by a new consumer that has ripped up the decades-old playbook that the industry has relied upon for years.


There are also new and dynamic players that have also revolutionized the market, namely  


Department stores have been among the hardest hit by those seismic changers as Americans spend money on their homes or on dinners out, rather than on clothing. When they do buy clothes, they’re not spending much, hitting up places like T.J. Maxx for fat discounts.


Sears has upped its presence online, but is having a hard time disguising its age. Its stores are in need of a major redo.


Longtime rivals like Wal-Mart and Target are spending heavily to revitalize stores and they’re intensely focused on a new consumer that goes online before stepping into a store.  Meanwhile, J.C. Penney has been hitting Sears hard by bringing back major appliances to its stores. Penney, Macy’s and others have been shuttering locations as well. But real estate research firm Green Street Advisors says about 800 stores, or 20 percent of all U.S. mall anchor space, would need to close to match the inflation-adjusted sales productivity of 2006.


Sears in January said it would close 108 additional Kmart and 42 more Sears locations.


In its most recent quarter, Sears, based in Hoffman Estates, Illinois, just northwest of Chicago, lost $607 million. Revenue declined to $6.05 billion from $7.3 billion during the same period the year before.


It was the sixth consecutive quarter of losses.


“They’ve been delusional about their ability to turn around the business,” said Perkins.

Arts & Entertainment

Liverpool Plans Extravaganza for 50 Years of ‘Sgt. Pepper’

It was 50 years ago today — almost — that Sgt. Pepper taught the band to play.

The English city of Liverpool is getting set to celebrate the half-centenary of “Sgt. Pepper’s Lonely Hearts Club Band,” one of the most influential albums by local heroes The Beatles.

The city announced Wednesday that it has commissioned 13 artists to create works based on the album’s 13 tracks. They include choreographer Mark Morris’ dance tribute to the title song, cabaret artist Meow Meow’s “outlandish procession” based on “Lovely Rita” and a mural by U.S. artist Judy Chicago inspired by “Fixing a Hole.”

There will also be a singalong by 64 choirs of the jaunty “When I’m Sixty-Four.”

The works will have their world premieres at venues across Liverpool between May 25 and June 16. On June 1 — the anniversary of the album’s release — the city will host a fireworks extravaganza by French pyrotechnic artist Christophe Berthonneau.

Tired of touring

By the second half of the 1960s, The Beatles had tired of touring. They played their last live concert in August 1966 and devoted their energies and creativity to the studio. “Sgt. Pepper” was recorded at London’s Abbey Road studios over five month in late 1966 and early 1967, and released on June 1, 1967.

Incorporating technological innovation and diverse musical influences — including Indian classical, English music hall and trippy psychedelia — it topped the charts in Britain and the U.S. and was instantly hailed as a rock ’n’ roll landmark.

‘“Sgt. Pepper’ pushed creative boundaries and we want to do exactly the same,” said Liverpool Mayor Joe Anderson. “This is a festival which brings high-end art into the mainstream and gives it a Liverpool twist which is thought-provoking, sometimes cheeky and always entertaining.”

Science & Health

Quick, Accurate Home Test for Checking Male Fertility

Scientists have developed a quick test —using a smartphone app — that a man can use in the privacy of his home to determine whether he is fertile. The sperm test could help millions of couples around the world that have tried unsuccessfully to conceive a child.

The new rapid, automated test can show within a matter of seconds whether the man’s sperm count is too low to conceive or if there are problems with motility of the sperm so the reproductive cells have trouble fertilizing a female egg.

The fertility test is an inexpensive smartphone attachment that the scientists said is made of materials which cost around $4.50. It was developed by researchers at Brigham and Women’s Hospital in the U.S. state of Utah and at Massachusetts General Hospital in Boston.





95 percent accurate

John Petrozza is director of Massachusetts General’s fertility center, which used the sperm app to analyze 350 samples. The experimental test proved to be greater than 95 percent accurate in detecting problems with a man’s sperm.

Petrozza said many women wonder why they have trouble getting pregnant after months or years of trying to conceive with their partner.

“Now we have something that can screen their partner and do it reliably.  And if there’s something there, they’ll get them in to see the fertility doctor or gynecologists much sooner and I think that’s always a good thing,” he said.

The test is designed to be used at home, rather than at a clinic, in a growing field of what is known as point of care medicine.

After placing a semen sample on a slide, the user inserts it into the attachment placed on the phone, using the device’s optics to analyze the semen. The smartphone’s powerful camera is able to take both still and moving pictures of the sperm sample.

Volunteers confirm simplicity  

The app guides users through a series of simple steps for analyzing the semen. Total sperm count is measured by a miniaturized weight scale that transmits the information wirelessly to the phone.  

Researchers gave the device to 10 untrained volunteers from the Boston clinic to confirm that it is simple to use.  In that test, researchers say it correctly classified 100 semen samples for fertility.  

The male fertility analyzer was described in the journal Science Translational Medicine.

Others uses for app

Petrozza says the smartphone attachment could also be used as a follow-up test for men who’ve had vasectomies,  voluntary operations to surgically interrupt a man’s sperm flow for birth control.  

At the same time, Petrozza envisions using the device to test for venereal diseases such as gonorrhea.  And scientists are now trying to perfect the point-of-care device to test for Zika virus in sperm, which has been shown to be a reservoir for the pathogen.

An analysis of the semen’s quality and concentration, said Petrozza, is based on parameters for fertility established by the World Health Organization.

He said the American Society for Reproductive Medicine has been in contact with the world body.

“And I know that recently they’ve worked with the World Health Organization in trying to look at global infertility and trying to see how can we can bring treatment, how can we bring diagnostic tests to resource-limited countries.  And this could be a potential way to do semen analysis in a very cost-effective way,” said Petrozza.

Millions of couples struggle with fertility

An estimated 45 million couples around the world struggle with fertility.  Forty percent of the time, say experts, infertility is due to abnormal sperm.

Petrozza and colleagues are aiming to get the male sperm analyzer on the market in the next 18 to 24 months, to be sold alongside pregnancy tests.

He says they’re hoping to keep the cost of the device to anywhere from $30 to $45.

Economy & business

US Farm Interests Caution Trump on Mexico Trade War

Farmers in the U.S. agricultural heartland who helped elect Donald Trump are now pushing his administration to avoid a trade dispute with Mexico, fearing retaliatory tariffs that could hit over $3 billion in U.S. exports.

The value of exports at risk is based on a Reuters analysis of a tariff list that Mexico used in a trucking dispute six years ago and that  Mexican officials have said could serve as a model if Trump sets new barriers to Mexican goods.

Pork producers contacted Trump’s transition team soon after the November 8 election to stress that tariff-free access to Mexico has made it their top export market by volume, said John Weber, president of the National Pork Producers Council.

The council has sent the administration multiple letters, including one signed in January by 133 agricultural organizations, and is arranging for several hog farmers to fly to Washington next month to talk to officials.

‘Pounding them’ on trade

“We just keep pounding them on how critical trade is to us,” said Weber, who fears Mexico could revive the list of mostly agricultural products it successfully used to push Washington into letting Mexican truckers on U.S. highways in 2011.

Pork products topped that list and, if revived, the tariffs would apply to over $800 million worth of annual pork exports, according to data compiled by IHS Markit’s Global Trade Atlas.

“We’ll be the first to take the hit,” Weber said.

The lobbying effort by U.S. businesses that rely on the Mexican market shows how Mexico can press its case in Washington despite having an economy 1/17 the size of America’s and relying on the U.S. market for nearly 80 percent if its exports.

In Iowa, where pigs outnumber people 7 to 1, hog and grain farmer Jamie Schmidt voted for Trump in part on his promise to cut regulatory burdens for businesses.


Now he and others who farm the flat, rich land around Garner, Iowa, worry about trade. Schmidt gets about half of his income from hogs, earning $4 to 5 for each of the 425 pigs he sells per week, usually to a Tyson Foods packing plant in nearby Perry, Iowa.

Tariffs from Mexico could depress U.S. wholesale prices and wipe out his profits, Schmidt said. “It would be devastating.”

Targeting states

In December, after fears of a trade dispute fueled a deep peso slump, Mexico started mapping out U.S. states that are most reliant on its market, replicating the strategy it used in the trucking dispute, said two senior Mexican officials.

Mexican officials also prepared briefs, seen by Reuters, on Mexico’s own risks in a dispute, including losing much of its cost advantage in building cars, such as the Ford Fusion made in Hermosillo, Mexico.

Reuters could not verify a complete list of products and states Mexico considered targeting this time around.

But the country’s foreign minister said last month that tariffs could target Iowa, which raises a third of U.S. hogs and exports about a quarter of its pork production, $100 million of which went to Mexico last year.

The minister also said tariffs could aim at Wisconsin, the center of U.S. cheese production, and has singled out Texas for its “notable” trade surplus with Mexico. All three states voted for Trump in the 2016 election, with the president taking Iowa and Wisconsin by slim margins.


Trump has accused Mexico of destroying U.S. jobs and has vowed to leave the 1994 North American Free Trade Agreement with Canada and Mexico if he cannot renegotiate better terms with Mexico. The United States went from running a small trade surplus with Mexico in the early 1990s to a $63 billion deficit in 2016.

Besides pork, cheese was also a top target in the trucking dispute in which Mexico retaliated with tariffs against rules that banned its trucks from U.S. roads.

$3B-plus in U.S. exports

Some $200 million in current annual exports of cheese would be targeted if the tariff list were revived, according to the IHS database, which the U.S. government uses to measure the impact of trade disputes. The full tariff list would apply to $3.25 billion in current U.S. exports.

John Holevoet, the director of government affairs at Wisconsin’s Dairy Business Association, said he has attended multiple meetings with Wisconsin federal lawmakers this year where risks of Mexican trade were discussed.

Weber of the pork producers group said he believed the Trump administration understands the vulnerability of U.S. farm exports. Republican Representative Steve King, who represents Iowa’s agriculture-focused 4th Congressional District, also pointed out that Iowa’s role as the first state in the presidential nominating process helps keep farm interests in Washington’s view.

But King told Reuters he was worried the White House was still not taking trade risks seriously enough.

A possible 20 percent tax on Mexican imports, which White House spokesman Sean Spicer has said could also pay for Trump’s proposed border wall, would cause a trade war, he said.

King said he had been in contact with the White House on the matter but had yet to secure a one-on-one meeting with the president. “I’m making sure that here in Washington they know what this means.”

Science & Health

UNICEF: One in Four Children May Face Severe Water Shortages by 2040

One in four children — 600 million in total — may live in areas with severely limited water resources by 2040, putting them at risk of deadly diseases like cholera and diarrhea, the U.N. children’s agency UNICEF said on Wednesday.

Already some 500 million children live in areas with limited water supplies, and the demand for water today far exceeds available resources in 36 countries, UNICEF said.

Supplies are expected to shrink further due to droughts, rising temperatures, flooding, population growth and urbanization, the U.N. agency said in a report.

If no action is taken to clean up and conserve water supplies, more children will be forced to drink potentially unsafe water as a result, UNICEF said.

Climate change plays a part

“Around the world, millions of children lack access to safe water — endangering their lives, undermining their health, and jeopardizing their futures,” said UNICEF executive director Anthony Lake.

“This crisis will only grow unless we take collective action now” he added in a statement.

Climate change is one of the reasons behind reduced water sources in the future, impacting “the quality and quantity of the water,” Cecilia Scharp, a senior water advisor at UNICEF, told the Thomson Reuters Foundation.

Flooding, which is expected to increase due to rising sea levels and changing weather patterns, can pollute water supplies and spread unsafe water across wide areas. Droughts are also expected to increase in frequency and severity.

More work for women, girls

Women and girls now spend 200 million hours a day collecting water, and this will rise if they are forced to travel further to reach water sources, making them vulnerable to attack in some countries, UNICEF said.

UNICEF’s projections are based on models assuming no action is taken to conserve water and tackle pollution, Scharp said. But governments, industries, agricultural businesses and communities can help diminish the impact of climate change on children in countries pressed for water resources, the agency said.

Governments should plan for risks to water supplies from drought, rising temperatures, flooding, population growth and urbanization, Scharp said.

Reusing waste water

Businesses should ensure they are conserving as much water as possible, and reusing waste water whenever they can, UNICEF said.

“You can use economic incentives so people don’t overuse [water],” Scharp said of local governments. “You can put restrictions on … personal use of water in urban areas where a lot of water is used for lifestyle activities, more than [for] consumption.”

Poorer children will be hurt the most by a depletion of water sources in the future. This “should come as no surprise,” UNICEF said.

Science & Health

Brazil Ramps up Domestic Space Satellite, Rocket Programs

Brazil is developing technology to send domestically-made satellites into space with its own rockets by the end of the decade, aerospace executives and officials said ahead of the launch of the nation’s first defense and communications satellite.

The launch of the French-made satellite, the first project of its kind led by Brazil’s private sector, was originally set for Tuesday but rescheduled for Thursday evening due to protests around the lift-off site in French Guyana.

The 5.8-tonne geostationary satellite will beam broadband internet from an altitude of 36,000 kilometers (22,000 miles) to remote parts of the South American nation and provide secure communication channels for military and government personnel.

The mission took on new urgency after revelations in 2013 that the U.S. National Security Administration had eavesdropped on Brazil’s president at the time.

“We cannot guarantee Brazil’s sovereignty as long as our defense communications are being carried by other countries’ satellites,” said Jose Raimundo Braga Coelho, president of the Brazilian Space Agency. “Brazil is a gigantic country and we need Brazilian satellites watching over it.”

The launch marks a renewed effort to expand Brazil’s long-standing aeronautics industry into space, with Embraer SA, the world’s third-largest commercial planemaker, seeking to consolidate a local supply chain.

Embraer subsidiary Visiona, a joint venture with state-run telecom Telebras, served as the prime contractor on the 1.3 billion reais ($420 million) satellite. Visiona subcontracted assembly to French group Thales SA, which also trained dozens of Brazilian engineers, and hired Arianespace for the launch.

While Brazilian industry made a small fraction of the new satellite, it could provide most of the content for a smaller class of satellite, weighing about 100 kilograms (220 pounds) and orbiting around 1,000 kilometers high, according to Visiona Chief Executive Eduardo Bonini.

Bonini said a “micro-satellite” of that kind, which Visiona would be able launch within two or three years, could serve key missions in Brazil, from tracking hydroelectric reservoirs and deforestation to monitoring its remote 17,000-km border.

Coelho said researchers at Brazilian air and space institute IAE are also developing proprietary rocket technology that could deliver micro-satellites into low orbit by 2019.

“The demand is there,” Bonini said. “It’s just a matter of the government setting priorities.”

Prioritizing Brazil’s space program has gotten tougher in recent years as the country struggled with what is now its worst recession on record and the government embarked on an austerity program that has hit defense and research spending.

While Visiona awaits definition of Brazil’s next satellite, Bonini said he is seeking more stable revenue sources, such as contracts for processing images from arrays of micro-satellites.

Visiona booked about 8 million reais in sales from that service alone last year, he said.

“We’re learning how to face the valley after the peak,” he said, referring to the space industry’s dramatic revenue cycles.


Arts & Entertainment

Company to Launch Diving Tours of Titanic

A travel company is offering a chance for well heeled travelers to dive the wreck of the RMS Titanic.

Beginning in May of next year, Blue Marble Private says it will offer a chance for nine travelers to dive some 4,000 meters below the surface of the ocean to see the famous wreck.

According to the company’s website, customers will dive “in a specially designed titanium and carbon fiber submersible, guided by a crew of experts.”

“You will glide over the ship’s deck and famous grand staircase capturing a view that very few have seen, or ever will,” the company added.

Tourists will also “explore Titanic’s massive debris field, home to numerous artifacts strewn across the ocean floor, nearly undisturbed for over a century,” according to Blue Marble Private founder Elizabeth Ellis.

According to CNN, the first trip is already sold out. The price for the eight-day adventure? $105,129 per person, which is about double the price charged by Deep Ocean Expeditions charged when it brought tourists to the wreck in 2012.

Time to visit the famous wreck may be running out.

CNN reported that a 2016 study said “extremophile bacteria” will likely dissolve what’s left of the ill-fated ship within 15 to 20 years.

In the early hours of April 15, 1912, the “unsinkable” Titanic struck an iceberg in the North Atlantic while making its maiden voyage from Southampton, England, to New York City. On board were 2,224 passengers, more than 1,500 of whom died as the ship quickly sunk.

The wreckage was first discovered 32 years ago.

Arts & Entertainment

Australia Couple Are 1st Foreigners to Own US Radio Stations

An Australian couple with roots in Alaska has bought more than two dozen radio stations in three states, marking the first time federal regulators have allowed full foreign ownership of U.S. radio stations.

The Federal Communications Commission recently approved a request by Richard and Sharon Burns through their company Frontier Media to increase their interest in 29 radio stations in Alaska, Texas and Arkansas from 20 percent to 100 percent.

The agency long took what some viewed as a hard line in limiting foreign ownership under a 1930s law that harkened to war-time propaganda fears. But in 2013, it acknowledged a willingness to ease up after broadcasters complained the rules were too restrictive of outside investment.

The Burnses are citizens of Australia but have lived and worked in the U.S. since 2006, on special visas offered for Australians.

A family who owned six of the Alaska stations provided the opportunity that brought the couple to the U.S. The family wanted someone with international experience to operate the stations and help move the company forward, Richard Burns said. The stations in the Lower 48 were purchased later.

The Burnses’ request to acquire full ownership was unopposed. The acquisition includes AM and FM stations and relay stations known as translators that help provide reception.

Richard Burns said he and his wife consider Alaska home and are pursuing U.S. citizenship.

“Our life is here in Juneau, Alaska, every single day,” said Burns, who serves on the board of the Juneau Chamber of Commerce and in 2010 was named its citizen of the year.

Sharon Burns co-hosts a morning show on a Juneau country station the couple owns, and does on-air work for two of their other stations in southeast Alaska and one in Texas, her husband said. Richard Burn is the stations’ CEO and a host on their Juneau classic hits station.

The federal law restricting foreign ownership dates to the 1930s and initially was seen as a way to thwart the airing of foreign propaganda during wartime, according to the FCC. It restricts to 25 percent foreign ownership or voting interests in a company that holds a broadcast license when the commission finds that limit is in the public interest.

In 2013, in response to broadcasters, interest groups and others who considered the commission’s application of the law too rigid, the FCC clarified it has the authority to review on a case-by-case basis requests exceeding that threshold, and it is open to doing so.

The commission last year adopted rules for publicly traded companies following a case involving Pandora Media and questions about its level of foreign ownership as it pursued acquisition of a South Dakota radio station. Then-FCC Chairman Tom Wheeler said the case underscored the need for more clarity for broadcasters and investors in the review process.

It’s unclear how many other foreign citizens have a stake in U.S. radio stations. The FCC said it does not keep a comprehensive accounting because stations generally don’t have to disclose smaller or nonvoting interest holders.

Lisa Scanlan, deputy chief of the FCC’s audio division, said that as part of its public interest analysis, the commission consults with executive branch agencies that do independent reviews on issues including trade and foreign policy, national security and law enforcement.

Jessica Gonzalez is deputy director and senior counsel for the group Free Press, which has concerns about media consolidation. She said she’s not opposed to the Burnses’ case. But she said the larger the company, the more skeptical she becomes.

“I’m not fond at all of the idea of giant foreign companies or giant domestic companies buying up a bunch of radio stations,” she said. “It’s problematic.”

She said an owner’s nationality doesn’t make a difference to her. “It’s just a matter of whether or not they are actually going to serve their community,” she said.

Richard Burns agreed. He said it’s critical for radio station owners to be invested in the communities they serve.

He cited his wife, who does her show from Texas when she’s there. Around Christmas last year, Sharon Burns delivered cookies to and spent time with first responders.

“If you’re a good radio operator, I don’t think it matters if you’re foreign or not, as long as you engage in the community and you understand it,” he said.