ILLINOIS – US department store retailer Sears Holdings has announced it is to close an additional 39 Sears and 64 Kmart stores as it seeks to return to profitability. The company said in a statement that the unprofitable stores will close between early March and early April, while liquidation sales are due to begin in mid-January.
Is it too little too late for Sears? The business is facing a monumental challenge. To offer context, Sears shrunk from 2,601 stores in Q3 2012 to 1,104 in Q3 2017, with the further store closures to come.
In the first three quarters of 2017, the retailer lost over US$1.6bn, following on the back of a US$2.2bn loss in 2016 and a US$1.1 billion loss in 2015.
Sears’ plans has always been to shrink a large unprofitable business into a small profitable business. Sadly, the company seems go be going from large and unprofitable to small and unprofitable, its customers having left in droves in recent years.
In a statement the retailer put a brave face on things. “Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size,” the company said in a statement. “In the process, as previously announced we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members.”
Sears has been offered several lifelines in recent months, including a US$100m cash injection by Sears Holdings owner and CEO Edward Lampert in the run up to the holiday shopping season, and a deal to extend the maturity of its existing term loan. December an investor in the company suggested it consider its options – including going private – amid 24 straight quarters of sales declines.