Sears to close another 78 stores

Apr 21, 2016, 7:30 PM EDT
(Source: Mike Mozart/flickr)
(Source: Mike Mozart/flickr)

Sears will close another 78 stores, or 5% of the total, in a bid to restore profitability.

Reuters reports:

Sears Holdings Corp said on Thursday that it would close 78 stores in the coming months, or about 5 percent of its total store network, the loss-making retailer's latest move to shrink its operations. The company, which had 1,672 stores as of the end of January, said it would close 10 Sears department stores and 68 Kmart discount stores, with nearly all of the closings occurring in late July. For years Sears has slashed costs and sold assets and sought to remake its business model built around a smaller store base, innovative online services and data-driven loyalty program. So far those efforts have not restored profitability. In February, Sears had warned that it was looking to cut staff and accelerate store closings.

The Wall Street Journal notes:

The company didn’t say how many workers would be laid off but said eligible workers could apply for open positions at other stores. “We’re focusing on our best members, our best categories and our best stores as we work to accelerate our transformation,” Chief Executive Edward S. Lampert said in a news release. Closing Sears stores will start liquidation sales on April 29 and Kmart stores on May 12. A Sears spokesman noted that the decision to close the stores followed an evaluation of their performance and the timing of lease expirations. Sears ended the most recent fiscal year with a $1.13 billion net loss as sales fell 19% to $25.15 billion and has since raised more than $1.2 billion in new debt to cover operations. As of Jan. 30, the company had about $3 billion in borrowings.

CNN Money writes:

Sears stock has been in a downward spiral for some time, sinking 37% in 2015 due to meager sales. Shares are down another 12.4% so far this year. It hasn't been profitable since 2012.