The Wall Street Journal reports that Sears Holdings Corp. “has begun to notify its retirees that it will make further cuts to their medical benefits, citing rising health-care costs and competition from retailers that provide little or no medical coverage to retired employees.”
Retirees younger than 65 years old will still have access to medical coverage, the paper reports, but Sears will no longer pay anything toward the coverage. Many in this group will become eligible for subsidized coverage when they turn 65, Sears said.
Retirees who are older than 65, and who retired before Jan. 1, 2000, will continue to receive payments from Sears for medical benefits, but the payments will be smaller than in the past.
"The key to being a great company is lowering our overall cost structure so we can be competitive," said company president Aylwin B. Lewis. "A lot of our very excellent competitors don't have these legacy issues."
Sears was acquired by Kmart earlier this year.
Retirees younger than 65 years old will still have access to medical coverage, the paper reports, but Sears will no longer pay anything toward the coverage. Many in this group will become eligible for subsidized coverage when they turn 65, Sears said.
Retirees who are older than 65, and who retired before Jan. 1, 2000, will continue to receive payments from Sears for medical benefits, but the payments will be smaller than in the past.
"The key to being a great company is lowering our overall cost structure so we can be competitive," said company president Aylwin B. Lewis. "A lot of our very excellent competitors don't have these legacy issues."
Sears was acquired by Kmart earlier this year.
- KC's View:
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Here’s the question we would ask.
Is Sears (and, by extension, Kmart) trying to cut its way to profitability?
Because that will only take it so far.
End of the day, it has to have stores that sing to the consumer, that compel the consumer to walk in the front door.
Singing off-key doesn’t count.
