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.
Actually it was K-Mart which purchased Sears. They did it right after being released from bankruptcy.
I hate to see these Legacy stores going bye bye. Nostalgia I guess? Sears has had horrible management decisions in the last decade or more. They have sold off their only profitable assets like Craftsman, is Kenmore is next? (Yes I know those products are made by whirlpool and what not) but the Kenmore name is Gold.
They should have retrenched years ago ...downsized and became an appliance and tools retailer. Craftsman and Kenmore and lttle else. I have seen a few TV commercials in the last few months of privately owned mini Sears franchise stores just for their bread-and-butter items. Probably too little to late. Sad.
Last year we walked into the closest Sears store to look for a new bed. Most of the Queen and King sized beds were listed at $3000 to $7000 but were on sale for 1/3rd off.
The only one we even thought of affording was uncomfortable so went elsewhere.
It used to be a cool company with a Catalogue selling mail order materials to build yourself a house.
Then some MBA decided that could cut expenses and raise prices.
The first thing they did was started treating their employees like crap and getting rid of their full-time folks.
Doing that is the first but major step in starting the decline of a corporation. Their employees used to love working at Sears and the company thrived but then the influx of part-time employees hit, and employee benefits and treatment declined. The nails were being hammered into the coffin.
The house components arrived individually numbered like the pieces of a puzzle and you assembled them on site. Everything you needed was included.
Look what a couple thousand US dollars would buy you at Sears 100 years ago:
http://www.searsarchives.com/homes/1908-1914.htm
[I remember Sears was like $100 or $200 & they were talking about the Real Estate Sears has
Now look at it $2.81
...
I remember when Eddie Lampert was called the next Warren Buffett.]
The Sears store I went to as a kid is on the list.
Brookdale mall in Brooklyn Park, Minnesota. It is on the list of deadmalls.
Most of the site was torn down several years back and a Wal-Mart built and many restaurants and a tire shop built so not much for high wages.
I was last there in 2004 during a visit to the hometown and the mall was basically an indoor swap meet before the tear down. What killed it was the bus line from downtown and North Minneapolis area that brought in the criminals and drove away honest people.
A much nicer shopping center several miles up the road from there was built in Maplewood.
The Sears here is gone. The Kmart seems to have very few customers. Near by sears and k marts are closed.
Never go Public. If you are anywhere near successful the Wall Street investment houses will snap up huge chunks of your stock and then dictate the operations of your business.
Those Wall Street millionaires and billionaires have no idea how to run a company. They only know how to milk near-term profits to benefit themselves then declare bankruptcy and walk away with even more money while they company folds.
No matter what folks say that is part of the reason Sears folded as they were bought out. Also, you can see Toys R Us and other major companies who were totally trashed by the Harvard MBAs putting instant cash in their pockets while gutting the business. Cabela's almost went that way but Bass Pro actually saved them.
Or, do as many, perhaps most, do. Take the money and start a new business.
Big score!
My sister worked for Sears for 30 years and was a manager of a parts and repair center at the end. When she started she had a Defined Pension that would have allowed her to have a comfortable, if frugal, retirement but Sears sold themselves off and the pension plan was dissolved. The 401K that took its place was gutted when Sears was sold off a second time (the law allows for that).
When my sister retired she was offered $300 per month or $75,000 lump sum so she took the lump sum, threw it in an investment, then started another career.
I remember Sears.
KMart bought out Sears. Even though the actual deal was the other way around in regards to who ran what, Sears was bought out so the corporation could shed itself of retirement issues and take some of the current 401K money.
Yes, Federal law allows for the gutting of 401Ks in a buyout and the funds, including the employee contributions, are considered corporation assets.
My sister was screwed twice while working for Sears for 30 years due to the buyouts.
If they had half a brain theyd do this. sears online is the best performing section sears has left, when it works.
But think, sears catalog was a big thing like penneys catalog. turn catalog into online, and you’ve got the modern version of catalog.
What a shame. Another American icon going down the drain.
I have some Craftsman manual tools I bought as a teenager. Still work great. I remember breaking a 3/4” ratchet using it in a air wrench (which it wasn’t designed for). Took the broken ratchet back to the store and the man said, “Go pick out another one. No charge.” Now that’s a guarantee!
Kobolt tools are made by Snap-On. What’s not to like?
There's a hilarious irony in that.
If Sears were to revive their turn of the 20th Century catalog prefab houses, the Victorian designs untouched, except for the updating to allow for modern kitchen appliances, plumbing and electrical wiring, they would make a mint.
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