Sears' online push leads to closure of flagship store in Chicago
22 Jan 2014
Sears Holdings Corp is shutting its downtown Chicago flagship outlet in April, the latest move by the retailer to cut the number of its stores as it turned more to online retailing.
A Sears spokesman said yesterday that the store had lost ''millions of dollars' since opening in 2001.
The closing would leave Sears' namesake chain without a store in the downtown core of its hometown, though it operates three others in Chicago.
The company which also operates the Kmart discount chain has close around 300 US stores since 2010.
The store has around 160 mostly hourly employees, who would get severance as also the chance to apply for open positions at other Sears or Kmart stores.
According to the spokesman the store's closure was part of the company's ongoing effort to cut costs.
In a blog post yesterday, hedge fund manager Edward Lampert, Sears' CEO and top shareholder, said store closings were necessary due to changing habits of shoppers who were buying more online.
"The consensus about decreased store traffic also highlights another decision that has steered our work: we very often need less space to serve our members better and we may need fewer locations as well," Lampert said.
"As difficult as these changes are, we believe the alternative of failing to plan for or even see where the retail industry is heading would be far, far worse."
The retailer reported a 9.2-per cent fall in comparable sales for the holiday season at its namesake chain, its latest poor showing.
While Sears has a storied history associated closely with Chicago's identity as a centre of business, the business has been declining for year, unable to take on discounters, big box retailers and traditional department stores.
Revenue at Sears Holdings, has been declining each year since 2005, when Lampert, a hedge fund manager and billionaire, merged Kmart and Sears in 2004 in an $11-billion deal.
Sears is set to report full fourth-quarter results at the end of next month.
The Chicago Tribune newspaper quoted Neil Stern, senior partner at Chicago-based retail consulting firm McMillanDoolittle as saying hopefully the company stabilised and could reach the long-term strategy Lampert put in place.
