Sears closing more stores just ahead of the holidays
At least seven Sears stores and five Kmart stores are set to shutter ahead of the holiday season, Business Insider reports.
Some of those were previously reported, but a few more are set to shutter a few days before Christmas. A Kmart store in Poughkeepsie, New York, for example, will lay off 71 employees Dec. 23, according to a Worker Adjustment and Retraining Notification filed with the state in September. A Sears store in Willliamsville, New York, will lay off 40 workers on Dec. 18, according to another September WARN filing. Neither store is listed on the company's compilation of planned closures.
A Sears spokesperson didn't confirm the additional closures to Retail Dive. "We continue to evaluate our network of stores, which is a critical component to our integrated retail transformation, and will make further adjustments as needed," he said in an email, referring Retail Dive to the company's second-quarter earnings report.
This year the struggling department store retailer over and over has announced store closures that are adding up to hundreds across the country. In May, the company said it closed 108 stores (67 Kmarts and 41 Sears stores) in the first quarter of this year and announced plans to close another 70. In August came a notice that another 46 would shutter.
Sears has said the moves are part of its ongoing efforts to "streamline Sears Holdings' operations, strengthen our capital position and focus on our best stores."
Those remaining stores could suffer from the company's frenetic cost cutting, including corporate layoffs and efforts to raise liquidity, such as sales of its private labels.
Sears shocked the retail world last year with the sale of the popular Craftsman brand. The retailer has other assets to sell, including its Kenmore and Sears Home Services businesses, both of which Sears CEO Eddie Lampert has offered to buy through his hedge fund, ESL Investments.
Lampert has also delivered a proposal through his hedge fund, ESL Investments, to free up $33 million a year in cash interest, $1.2 billion in liquidity over two years and cut $1.1 billion in upcoming debt in exchange for various asset sales.The Sears chief and majority owner is reportedly hoping to avoid bankruptcy, which several analysts have been predicting for years now. Outside bankruptcy, such maneuvers are probably necessary. But not necessarily sustainable, according to GlobalData Retail Managing Director Neil Saunders.
"As usual, Sears is focusing on financial maneuvers and missing the wider point that sales remain on a downward trajectory," he said in comments emailed to Retail Dive. "[B]oth Sears and Kmart are suffering from chronic underinvestment and a lack of clarity in terms of their proposition. Even in a strong consumer economy, customers are still drifting away to other brands and retailers. ... Arguably, the various disposals will actually weaken the balance sheet and will result in an even higher deficit between assets and liabilities. In our view, this is simply storing up trouble for the future."
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