You can add another 20 Sears and Kmart stores to retail’s graveyard.
Sears Holdings (SHLD) is closing another 20 locations on top of recently announced shutterings, bringing to total store closures to 260 this year for the struggling retailer which is trying unsuccessfully to stanch years of sales declines. The latest closures include 18 Sears stores and two Kmart locations, according to a regulatory filing on Friday by real estate investment trust Seritage Growth Properties, which was spun off by Sears in 2015.
These stores will start liquidation sales by June 30 and be closed by mid-September, Sears said in a statement.
“We understand that members may be disappointed when we close a store, but our Shop Your Way membership platform, websites and mobile apps allow us to maintain these valued relationships long after a store closes its doors,” the company said. However, rivals Macy’s (M) and J.C. Penney (JCP) have each said at recent investor conferences that online sales also decline in areas where they’ve closed a store.
Last month, Sears Holdings reported sales fell 11.9% at stores open at least a year in the first quarter, doing much worse than other retailers and continuing a long downward trend despite the pruning of weak locations. And last week, it announced 400 corporate jobs in addition to a previously announced $1.25 billion cost restructuring. A few months ago, Sears spooked investors and stoked bankruptcy fears when it conceded there was “substantial doubt” in the market about its long-term prospects. Sears Holdings CEO Eddie Lampert last month blamed the media for exacerbating the company problems but told investors at Sears’ annual meeting that the retailer is “fighting like hell.”
Seritage Growth Properties is made up largely 235 Sears and Kmart stores in a deal that raised more than $2 billion in 2015, one of many moves it has made to shore up its finances. (A recent example is its sales of the its Craftsman brand to Stanley Black & Decker this winter.) Under terms of Sears’ agreement with Seritage, Sears can exit a lease if a store is unprofitable by making a payment equal to one year of rent. Sears recently said it was accelerating its exit from unprofitable locations. It is trying to reinvent itself as a retailer less reliant on physical space and more focused on its loyalty program. And it is testing some new formats including an appliance and mattress specific store.
The latest closings are just among the hundreds of department stores slated for shuttering by Sears, Penney, Macy’s and by regional chains.