The company’s latest attempt to grow its business, Stratton, is struggling to meet demand amid rising prices, a setback that could spell a slow death for the company.
Stratton said Friday that it expects to report a loss of about $200 million in its second quarter after making a loss on the $1.5 billion sale of its consumer products business in June.
The company had hoped to sell about 4,000 stores for $7.8 billion.
But sales dropped to about 3,000 in the third quarter, after the company announced that it was shutting down all its retail stores and moving its brands to a new distribution center.
The Wall Street Journal reported that Stratton will spend $5 billion to close the stores, which it bought in 2009 for $1 billion.
Strington’s share price fell 8.3 percent to $10.85 on the Nasdaq.
Stratton said it was not expecting a big loss for the quarter and expects its sales to rebound, but it still needs to sell more products to survive.
“Stratton is still in the process of making the difficult decision to shut down our entire consumer products division and begin an aggressive expansion of our online retail business,” the company said in a statement.
Strategy Analytics analyst Jason Chen wrote in a research note that Strontys market share in the home decor space has been declining for years, with the company posting a 26.6 percent decline in the quarter ended June 30.
The company has struggled to grow at a fast enough rate to compensate for its losses, and Stratton is not seeing the results that other competitors are seeing.
Strontys stock has fallen more than 25 percent this year, falling more than 50 percent since the beginning of the year.