Profits at US retail group Sears were hammered by aggressive discounting in the fourth quarter.
Domestic like-for-like sales fell 4.5% over the period and 4.3% for the year, with total sales down 6.8% to US$15.1 billion (£7.6bn).
Gross margin fell 100 basis points to 27.7%. Sears Domestic, which comprises the group’s US Sears stores, and department store chain Kmart were blamed for the drop, after the chain’s increased discounting to combat falling sales.
Interim chief executive and president W Bruce Johnson said: “Our fourth-quarter and full-year results continued to be hit by the worsening economic conditions, as well as increased markdowns.”
He added that Sears would aim to tighten cost management and inventory levels in 2008.
Separately, heavy markdowns at US department store chain Kohl’s also hit profits, which fell 15% to US$411.7m (£207.6m) for the fourth quarter, against a 4% rise in like-for-like sales.
Chairman and chief executive Larry Montgomery said 2008 would be “challenging”.