Sears Holdings to Close Stores on Weak Quarterly Sales
HOFFMAN ESTATES, Ill.--In the light of poor sales during the fourth quarter, Sears Holdings said it would close from 100 to 120 Sears and Kmart stores and implement other actions to reduce expenses and continue the transformation of its business model.
The company said quarterly same-store sales to date for Sears stores are down 6 percent, while quarterly same-store sales to date for Kmart store are off 4.4 percent. Sears said weak sales in consumer electronics and home appliances hurt Sears stores, while decreases in consumer electronics and apparel sales hurt Kmart's quarterly performance.
The statement did not give a time table for the closing of the stores, and said it has not yet determined which specific stores will be closed.
Sears said the store closings should generate from $140 million to $170 million in cash once the net inventory is sold, and would generate additional cash from the sale or sublease of the related real estate. The company said it would also evaluate store performance going forward and "act opportunistically" on poor performing stores.
The company also said it would act to reduce fixed costs by $100 million to $200 million, slim down inventories by $300 million and focus on improving gross profits through "better inventory management and more targeted pricing and promotion."
The new business model, as explained by Sears Holdings CEO Lou D'Ambrosio, involves "serving our customers and members through integrated retail--at the store, online and in the home."