It was a holiday disaster for the retailer.
The declining retailer, which operates Sears department stores and the Kmart discount chain, said on Thursday that same store sales at Sears and Kmart for the first two months of the holiday season quarter declined in the range of 12-13%, a much bigger drop than in recent quarters, signaling that its purported reinvention as a retailer needing fewer stores and focused on a membership model is simply not taking hold after years of promises by company executives.
So it’s easy to see why the retailer in the last two weeks said it would close 109 Kmart and 41 Sears stores, just the latest paring of once-massive fleets. The company said that the stores in question had sales of about $1.2 billion in the last year but generated an adjusted loss of $60 million.
“Many of these stores have struggled with their financial performance for years and we have kept them open to maintain local jobs and in the hopes that they would turn around. But in order to meet our objective of returning to profitability, we have to make tough decisions and will continue to do so, which will give our better performing stores a chance at success,” said Sears Holdings CEO Eddie Lampert.
In the first three quarters of the fiscal year, the company closed 140 Kmart stores, and 30 Sears stores, leaving the chains with 800 stores and 675 stores respectively, before the latest store closing announcements. (A decade ago, there were 1,462 Kmart stores, and 866 U.S. Sears stores.)
The company, which has lost about $10 billion since 2010 amid chronic sales declines, has in the last 10 days announced a series of moves, including on Thursday the sale of its Craftsman tool brand, that have helped it line up another $2 billion or so in money and shore up its liquidity. These moves come after countless similar efforts in recent years, including loans from Lampert’s hedge fund and the sale of attractive assets like its best stores and several brands.
Here is a list of the Sears and Kmart stores included in the next round of closings: