At least 100 Sears, Kmart stores to close after poor holiday
NEW YORK -- After a disastrous holiday shopping season, the parent company of Sears and Kmart will close at least 100 stores to raise cash -- a move that sparked speculation about whether the 125-year-old retailer can avoid a death spiral fed by declining sales and deteriorating stores.
Sears Holdings Corp., a pillar of American retailing that famously began with a mail-order catalog in the 1880s, declared on Tuesday that it would no longer prop up "marginally performing" locations. The company pledged to refocus its efforts on stores that make money.
Sears' stock quickly plunged, dropping 27 percent.
From Johnstown west, there are 17 Sears stores and 27 Kmarts in Pennsylvania.
The closings are the latest and most visible move by Eddie Lampert, the hands-on chairman who has struggled to reverse the company's fortunes.
As rivals Wal-Mart and Target Corp. spruced up stores in recent years, Sears Holdings confronted falling sales and perceptions of dowdy merchandise.
Some analysts wondered if it was already too late, questioning whether the retailer can afford to upgrade stores as it burns through its cash reserves.
The sales weakness "begins and some would argue ends with Sears' reluctance to invest in stores and service," Credit Suisse analyst Gary Balter wrote in a note to clients.
Spokesman Chris Brathwaite said no one had determined which stores would close or how many jobs might be cut. He disputed doubts about the company's survival, noting it still has $2.9 billion available under its credit lines.
Sears and Kmart were retail pioneers. Sears' catalog and department stores were fixtures of American life stretching back to the 19th century before being hurt in recent years by competition from steep discounters and by missteps that included forays into financial services and the decision to sell off a lucrative credit card business.
Kmart helped create the discount-store format that Wal-Mart Stores Inc. came to dominate.
Sears Holdings has watched its cash and short-term investments plummet by nearly half since Jan. 31, from about $1.3 billion to about $700 million.
The projected closings represent only about 3 percent of Sears Holdings' U.S. stores. And the company has actually added stores since the Sears-Kmart merger in 2005. It has about 3,560 stores in the United States, up from 3,500 right after the merger, thanks to the addition of more small stores.
But the company hinted that more closings could be on the horizon.
In addition to the closings, the company announced that revenue at stores open at least a year fell 5.2 percent for the eight weeks ended Dec. 25.
Kmart's layaway program, meant to help cash-strapped customers buy presents by paying for them a little at a time, faltered as Wal-Mart brought back layaway for the holiday season after getting rid of the program in 2006. Sears stores reported softer sales of home appliances, usually a strength.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- With most starters resting, Steelers turn in lackluster loss at Heinz
- Young guns lead way into pivotal Pirates-Cardinals series
- Liriano struggles as Brewers complete sweep of Pirates
- Indian SUV maker Mahindra to debut electric scooter in U.S.
- Robust jobs report could force Federal Reserve to raise interest rates
- Teens held for trial in cobbler heist
- Five details you shouldn’t give Facebook
- NexTier Bank buys Oakland’s Eureka to increase coverage in Western Pennsylvania
- LaBar: Best next opponent for Brock Lesnar
- Pittsburgh Mayor Peduto: Public has stake in Penguins
- Longtime Pittsburgh firefighter stayed active in service to city