Profits tumble at retailer Sears

The slowing economy has hit consumer spending

US retail group Sears has reported a 62% fall in second-quarter profits after it struggled to attract customers through its doors.

It earned $65m (£35.4m), or 50 cents a share, in the quarter, down from $173m, or $1.15 a share, a year earlier.

Revenues fell to $11.76bn from $12.26bn at the group, which operates Kmart, Sears and Roebuck stores.

Sears has struggled to turn its business around. Same-store sales have now fallen for the past 10 quarters.

Consumer spending

The retailer is continuing to search for a permanent chief executive to replace interim boss, Bruce Johnson.

"Our second-quarter results reflect the continued effect of a slowing economy, which contributed to the earnings declines we have experienced since the third quarter of 2007," said Mr Johnson in a statement.

Same-store sales fell 6.7% at Sears and 5.6% at Kmart. While same-store sales fell across most categories in Sears and Kmart stores, they continued to be offset by gains in consumer electronics, the company said.

Consumer spending is closely watched in the US because it accounts for about two-thirds of total economic activity.

The US government returned about $100bn in tax rebate cash to consumers between late April and mid-July, in an attempt to kick-start the economy.