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.
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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.”

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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.

The Markets January 2, 2009

Denver Post Latest to Suspend 401(k) Match

The latest 401(k) match to fall in recent months came at The Denver Post newspaper where managers and other non-union employees were informed their match would be suspended in 2009.
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A Denver Business Journal news report said ThePost’s owner, Denver-based MediaNews Group, revealed its intention in a December 24 memo distributed to exempt employees including editors and other supervisors. The company said it was “hopeful” the match would be reinstated in 2010.

The Business Journal said the 401(k) match suspension came after managers were notified in November that their traditional pension plans would be frozen.

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The latest notice, signed by Charles Kamen, MediaNews Group vice president for human resources, was not sent to union-represented Post workers, such as reporters and photographers, who also receive a company match.

“All of you are aware of the unprecedented challenges American businesses, and more specifically the newspaper industry, are facing today,” said a version of Kamen’s notice delivered at The Daily Breeze of Torrance, California, according to the Business Journal. “MediaNews Group is not immune from these difficulties nor is it exempt from having to make hard business decisions.”

The privately held company operates more than 50 daily newspapers in 11 states.

In Denver, both the Post and Rocky Mountain News have suffered losses that are believed to total several million dollars a quarter recently. News owner E.W. Scripps has put the News up for sale and will consider closing the paper if no buyer comes forward by mid-January, according to the Business Journal report.

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