Sears to close another 63 stores
- Sears Holdings plans to close an additional 63 stores under its Sears and Kmart banners, according to a company statement.
- The closures include 45 Kmarts and 18 Sears stores, mostly in the South and Midwest, according to the company. The company said that the closures were part of an ongoing effort to "transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members."
- Sears told affected employees of the closures on Thursday. Liquidations could begin as early as Nov. 9, Sears said. "It's important to note that these stores will remain open to serve members during the holiday season," the company said.
While most department stores have closed stores this year, Sears, with nearly 400 stores slated to shutter, has been doing it at a clip that outpaces its peers. In just a few years, the company’s footprint has shrunk to a fraction of what it was when the decade began.
It represents a furious effort to cut costs and rightsize as the company’s sales base shrinks. The once-dominant retailer has also shed corporate staff and sold off brands and property. Yet, it continues to lose money, albeit at a slower rate.
The company has, perhaps understandably, become sensitive to the narrative of decline around it. This week it took aim at The Wall Street Journal for a story detailing its fall from Amazon-like status in the 20th century and some of its current issues in keeping suppliers in its fold. (Sears called the story "yet another rehash of inaccurate assertions and negative speculation about Sears Holdings and its future.")
Sears has been able to stave off default for years largely through store closures (there have been hundreds this year alone), staff layoffs (also numbering in the hundreds this year), asset sales and loans from Lampert's hedge fund ESL Investments, which has provided hundreds of millions of dollars in credit in 2017. To try to revive sales, it's also partnered with Amazon to sell Kenmore products, tested new store formats and revived its holiday catalog. But few analysts see a turnaround ahead for the retailer.
Fitch's David Silverman, senior director for retail coverage at the ratings agency, told Retail Dive this summer that his team sees risk that Sears could default in the next year or two despite several restructuring moves in 2017. "The company continues to need $2 billion in liquidity every year to fund EBIDTA losses, basic maintenance, capex, pension payments, debt payments and other fixed obligations," he said. "While some of the moves they have made this year should be able to help the company operate in 2017, in our analysis, they have not changed the company's long-term picture.
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