Posted on 05/31/2018 2:19:02 PM PDT by Red Badger
Sears has identified another 100 unprofitable stores. It will begin closing sales at 72 of these stores "in the near future." The retailer said it continues to evaluate its store fleet and will make further adjustments "as needed and as warranted."
Sears Holdings said Thursday it will be closing more than 70 additional stores in 2018 as its sales continue to erode, dropping more than 30 percent in the latest quarter from a year ago.
The retailer has identified 100 unprofitable stores in total, and it will begin closing sales at 72 of these stores "in the near future."
"We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted," Sears said in a statement announcing its fiscal first-quarter results.
The department store chain has been caught in a vicious cycle — shuttering weak stores to reduce costs. But even as it closes more stores, sales fall further. In the latest period, Sears said roughly two-thirds of its sales decline was tied to store closures.
The company named 63 locations it plans to close; they are mapped here. Sears will list the additional nine locations in a forthcoming update.
Sears and Kmart operated 894 stores at the end of the first quarter, 381 fewer than it did a year ago. Most recently in January, the embattled company announced the shuttering of 64 Kmart stores and 39 Sears stores, adding to the hundreds of closures that have taken place over the past few years. Some locations are currently being auctioned off online.
CEO Eddie Lampert told CNBC in a recent interview: "We're not liquidating just to liquidate. We're liquidating ... to get capital to put into our pension plan. As opposed to erring on the side of, 'This store might work.' ... If it's not working, we've invested the time, so we've got to close it because we are now jeopardizing this [store] over here."
But still, the losses are mounting. In the first quarter, Sears reported it had a loss of $424 million, or $3.93 per share. Revenue fell more than 30 percent to $2.89 billion from $4.2 billion a year ago.
Same-store sales, a key metric used to monitor a retailer's health, were down 11.9 percent overall. This consisted of a 9.5 percent drop at Kmart stores and a 13.4 percent decline at Sears stores.
Sears' dire financial state has many industry experts thinking the company is on the brink of filing for bankruptcy.
Sears ended the first quarter with $466 million in its cash reserves, compared with $336 million in the prior period.
The retailer burned through $1.8 billion in cash in its operations during 2017, $1.4 billion during 2016 and $2.2 billion during 2015, company filings show. It ended last year with $336 million in its cash reserves, compared with $286 million the previous year, a slight uptick thanks to asset sales.
Sears had roughly $4.3 billion in funded debt as of Feb. 3, 2018, along with unfunded pension and retirement obligations of about $1.6 billion.
In addition to shedding its real estate, Sears currently has an independent committee evaluating a deal where the company would sell some of its other assets, including the Kenmore brand, to Lampert's hedge fund, ESL Investments. Earlier this week, ESL said it received "numerous inquiries from potential partners" that are interested in getting involved in such a transaction.
Lampert noted, as it relates to any future transactions, "speed and certainty ... are critical." Heading into the second half of the year, Sears must now gear up for the 2018 holiday season.
Read: It was once the biggest retailer in the US. 125 years later, Sears looks a lot different
CLARIFICATION: Sears has provided locations for 63 of the newly planned closures. It will give addresses for the other nine in a forthcoming update.
https://sc.cnbcfm.com/applications/cnbc.com/resources/editorialfiles/2018/05/31/053118-store-closing-list.pdf
Some of these stores have been on life support. Surprised the store in our area is staying open. Service is pathetic, inventory doesn’t match today’s buying public.
Personally I think they should close all of their stores, liquidate and pay creditors. They’ll end up closing them in the end anyway, why drag it out?
Mediocre quality, mediocre service, mediocre prices, mediocre everything.
When Sears had trained and helpful sales staff, good prices, quality products real lifetime guarantees, they flourished.
Then some MBA decided that could cut expenses and raise prices.
The bottom line looked good for quite a few quarters, and that’s all that matters, isn’t it?
Left them 15+ years ago after they outsourced their credit business. Hardly ever looked back.
I was inside one of their nearly-dead stores in 1996. That mall failed and has been completely razed. All that sprang up around it is long, long gone. Including a WM HyperMart, several restaurants and at least 2 strip malls.
Completely gone. You’d never know any of it was there.
Now look at it $2.81
I had not really thought about it but for some reason I thought they had gone out of business a few years ago.
“They’ll end up closing them in the end anyway, why drag it out?”
Because the people who make that decision (including the board) would no longer have a job.
So they milk it until they have an option or the cow runs dry.
“...Then some MBA decided they could cut expenses and raise prices.
The bottom line looked good for quite a few quarters, and that’s all that matters, isn’t it?...”
Agreed. The MBA probably got a raise & promotion out of it too. Then, moved on to another business to destroy.
NEVER let an accountant (bean counter) or a lawyer run your business IF you want to stay in business. Let em count the beans and provide legal council but don’t EVER let em manage anything else.
Sears, with the right management, could have been competitive with Amazon today, but they chose not to.
A Sears pension? You better practice saying "Welcome to Walmart" because you'll never get to retire.
Its just a market reality. When Sears itself came around more than 100 years ago it put thousands of small stores out of business.
I suggest pushing “SEARS ONLINE” as their likely possible future chance to adapt (”SEARS” is a major branding)
It is a shame.
I used to regularly shop at the K-Mart in Richfield (closed now for 10 years), a first ring suburb of Minneapolis. I liked what they had for selection.
There was no difference between buying my shampoo or dress socks there versus a Wal-Mart or Target.
Somewhere along the line (back in the early 90’s), K-Mart just went numb. They didn’t keep on the appearance of their stores, they didn’t keep on the kind of merchandise that people wanted their employees started getting a ‘hood attitude, etc.
It wasn’t just a case of K-Mart being unable to compete with the Internet. It was almost like they collectively went on auto-pilot sometime in the early 90’s. By the time they realized “Wait, we might have a problem here”, it was too late. Wal-Mart and Target passed them by.
Ah...the good old days. Cord pants with lifetime guarantee against holes, and Craftsman tools that weren’t made of pot metal.
About the only Kmart that I can think of is on Lake Street. I have to go to Sears every few years to get filters for my shop vac. Beyond that I don’t care.
As for K-Mart, they suck and should die. When I was a kid, Sears was the store to constantly visit. My dad would leave me at the food counter while he shopped. Popcorn and hot dogs were cheap, and the smell of popcorn wafted throughout the store, about 4 stories of goods. Just outside the food counter was a tire installation building and huge parking lot. To the side was a garden area selling plants, flowers and trees. Across the street was a block-long building doing car maintenance also with a huge parking lot. All under the Sears banner. This local Sears went under decades ago and was sadly missed here. Of about 4 stores in the immediate area only one remains.
Craftsman tools are now an Ace Hardware property....................
With all the stores they have around the Country, they can compete with Amazon by storing all their merchandise in their stores & shipping them out to customers in record time
Our K-Mart is still open, but I never see anybody there. Same with Target...................
Sears online would have been a good idea twenty years ago when they had a huge catalog mailing list and no competitors.
They really missed the boat going into the 21st century.
I see they are closing the one in the Burlington Center Mall in NJ, it was the only store left in the entire mall. I guess the mall is officially closed
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.