Sears, the fourth-largest US retailer, yesterday reported a 99 per cent drop in quarterly earnings, delivering a big blow to Eddie Lampert, the chairman and billionaire investor who engineered the chain's 2005 merger with Kmart.

The poor third-quarter results sent Sears shares down 13.5 per cent to $100.59 yesterday afternoon, close to a 2½-year low. In April, Sears shares were worth nearly twice as much, hitting a peak of $191.