On Thursday Sears Holdings said it had informed employees at 64 Kmart stores and 39 Sears stores that it will be closing those stores between early March and early April. Liquidation sales will begin as early as Jan. 12, according to a company statement.
Eligible employees at the closed stores will receive severance and can apply for open positions at area Kmart or Sears stores, the company also said.
The closures are part of the company’s ongoing assessment of its store base, according to the statement. Most recently, in October the company shuttered another 63 Sears and Kmart stores, mostly in the South and Midwest, making for roughly 400 total store closures in 2017.
Plenty of retailers are downsizing their physical footprints, after too many stores and malls were built starting at the end of the 20th century. But Thursday's announcement is just the latest in a series of store closures that have drastically shrunk two of the once most ubiquitous banners in American retail.
For the past few years, the news out of Sears has consistently been about declining sales, trouble with vendors and, most of all, closing and selling stores. Although occasionally there's an opening: last year Sears opened a handful of appliance and mattress stores that the company says are resonating with customers. So far, though, the openings have been few and the closings have been relatively massive.
Sears, along with Macy's and J.C. Penney, are "future-proofing their offerings by closing stores," according to a recent report from retail think tank Fung Global Retail & Technology.
"We estimate that these closures will result in a total of $2.5 billion in annual sales being freed up for alternative retailers to grab," the report noted. "Approximately $1 billion of that total will come from Macy’s closures, $1 billion from Sears and Kmart closures, and $500 million from J.C. Penney closures, we estimate." Fung analysts added that, based on shopper preference data, Macy's was likely to retain the highest share of sales from closed stores and Sears would see the lowest retention rates.
Around $1.5 billion, or 60% of those relinquished sales, will be in the apparel category, which includes footwear and accessories, Fung said. Kohl's and J.C. Penney will also benefit from the closures, even though Penney has also shuttered underperforming locations. Macy's, on the other hand, whose customers tend to be more concerned with brands and choice, and less so with price, will likely lose some sales to Amazon. Target, Kohl’s, Best Buy and J.C. Penney also benefit from Macy's closures, according to the report. Penney CEO Marvin Ellison himself recently said that he's gunning for Sears' lost appliance sales.