CALIFORNIA: Sears Holdings Corp is closing eight of its namesake department stores and 35 Kmart locations to cut costs and square footage in an effort to return to profitability, Chief Executive Officer Eddie Lampert said.
The store closings are in addition to 150 the company announced in January.
Once the largest US retailer, Sears has struggled with years of losses and declining sales as shoppers have shifted from the mall to the web.
The company said in February it would cut costs this year by at least $1 billion.
Shares of Sears fell as much as 4.8 per cent in afternoon trading.
“This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs,” Lampert wrote in a blog post.
He said employees who are eligible would receive severance and be able to apply for open positions at area Sears or Kmart stores.
Lampert added that Sears expects to open more smaller-format stores while shrinking its large, less-competitive ones.
He said Sears was on track to meet its cost-cutting targets.
“We reached the point in the past 12 months where some of our vendors have reduced their support, thereby placing additional pressure on our business,” Lampert said.
Sears supplier said in March they were doubling down on defensive measures, such as reducing shipments and seeking better payment terms, to protect against the risk of nonpayment.
Lampert added that Sears had amended its second lien credit facility to provide up to $500 million in additional borrowing capacity and had sold over $200 million in real estate, helping Sears pay down part of its real estate loan.— Reuters
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