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The Markets January 2, 2009
Sears Suspends 401(k) Match in Face of Declining Sales
Sears has announced that it is suspending its 401(k) match for most employees of the giant retailer.
Reported by Fred Schneyer
A Chicago Sun-Times article, quoting a December 30 memo to employees from Sears Holdings Corp. Interim CEO Bruce Johnson, said the match suspension is effective January 31, 2009 and that the company will consider reinstating it when its financial performance improves.
“In this difficult economy and fast changing retail environment, we need to remain flexible and focused on improving our operating metrics and continuously look for ways to reduce expenses,” Johnson said in the memo. “Remaining committed and steadfast in our attention to our financial priorities—improving margins, tightly controlling expenses and focusing on cash generation—should position us to perform well when the economy improves. We are embarking on a New Year. Many tough business decisions will be made now and in the coming year.”
Hoffman Estates, Illinois-based Sears now matches 100% of the first 3% of an employee’s contribution, and matches 50% up to the next 2%, a Sears spokeswoman told the newspaper Friday.
Sears will resume its 401(k) match when its financial performance improves, Johnson said.
Sears has appointed new executives of its business units, closed unprofitable stores and offered extended sales as it fights to turn around declining sales and earnings.