Sears to Accelerate Store Closings as Struggles Continue
Sears Holdings revealed on Tuesday it will accelerate the closing of some 50 retail stores this year and work on selling off other assets as the company's Sears and Kmart chain continue to struggle. The compnay explained the moves by revealing that holiday sales were well below expectations. In its latest guidance, the Hoffman Estates, Illinois retailer said it expects fourth quarter sales of $7.3 billion, down sharply from an $8 billion final quarter in 2015 and below analyst estimates calling for revenue of $7.4 billion. The company officially reports fourth-quarter numbers on February 25th. The company expects to report that sales at US Sears and Kmart stores open for a year or more dropped 7.1 percent as poor performance in their apparel divisions dragged down overall store performance. A spokesman said that the poor showing was in part due to unseasonably warm weather in many markets and "intense competition."
In addition to closing stores faster, Sears executives said they are looking for ways to save between $550 million and $650 million annually, including evaluating for possible workforce reductions. The company is already planning on selling some $300 million worth of non-core assets, and is in talks about unloading its Sears Auto Center business. The company has already begun moving a number of real estate assets, and noted that that plan will continue. Sears has been bleeding customers for years to cheaper online retailers and more style-oriented department stores like Target and JC Penny. Even the company's appliance division, which was once a thriving business has lost a step over sales offered at home improvement retailers like Lowe's and Home Depot. The company's shares have lost about half their value this year, and were down another 6 percent in early Tuesday trading.