Sears Holdings to close 100-plus stores
Hoffman Estates, Ill.-based Sears Holdings plans to close 100 to 120 Kmart and Sears full-line stores after reporting a disappointing recent performance. The Tuesday morning announcement -- contained in a press release titled "Sears Holdings Provides Update" -- reported a 5.2% comp-store sales decline for the quarter-to-date period, and a 2.6% decline in the year-to-date period, ended Dec. 25.
At Sears Domestic, slow moving consumer electronics and home appliances were leading causes of declines. At Kmart, consumer electronics and apparel were slow. Big-ticket items continue to perform poorly.
It remains unclear which stores will be closed; the company said it will post a list when the final determination is made.
Closing stores is one of several actions the company said it is putting in place. The moves are designed to "reduce on-going expenses, adjust our asset base and accelerate the transformation of our business model," said CEO Lou D'Ambrosio.
"These actions will better enable us to focus our investments on serving our customers and members through integrated retail -- at the store, online and in the home," he added.
Excluding the effect of store closures, Sears expects to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year.
It also intends to focus on improving gross profit dollars through better inventory management and more targeted pricing and promotion.
The company also intends to reduce fixed costs by $100 to $200 million.
According to the company, the store closing move reflects a change in strategy. "While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment," the announcement read.
The company's 2011 performance will cause a fourth-quarter asset write-down of $1.6 billion to $1.8 billion.