Sears to close 100-120 Kmart and Sears stores in the US
27 Dec 2011
Sears Holdings Corp, the fourth-largest retail chain in the US, today said it plans to close 100-120 Kmart and Sears Full-line stores due to declining sales and margin pressures.
Illinois, Chicago-based Sears, which runs over 4,000 of its namesake stores, Kmart, The Great Indoors, Lands' End, and speciality stores in all 50 states of the US, said that by closing 100 to 120 Kmart and Sears Full-line stores, it expects to generate $140 to $170 million of cash as the net inventory in these stores is sold and generate additional cash proceeds from the sale or sublease of the related real estate.
"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model,'' said Lou D'Ambrosio, the CEO of Sears in a statement.
The retail chain that generates over $43 billion in annual revenues, added that it intends to optimise the space allocation based on category performance in certain stores.
Excluding the store closures, Sears expects to reduce 2012 inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter and reduce fixed costs by $100 to $200 million.
For the latest quarter, same-store sales at its Kmart unit dropped 4.4 per cent and Sears Domestic comparable sales fell 6 per cent. Kmart's quarter-to-date store sales decline was due to decrease in consumer electronics and apparel categories and lower layaway sales.
