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.
Too late for that
They should have dumped the clothing dept decades ago and focused on hardware, housewares, appliances and tools.
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.
Can’t think anyone would be worse off if they just closed ‘em all.
The CEO and his hedge fund are buying all the real estate both out from under Sears (and leasing back to them) or buying the property outright when they close. He has no reason to try to keep them open when he personally and his hedge fund are getting valuable property keep and will make vast amounts of money selling or renting them to other companies.
A Hedge Fund owner is not well suited to run retail...
I thought it was Stanley - Black & Decker that bought the Craftsman division. The local Lowe's just recently ran a "Welcome Craftsman" event. I was pleased to see that, even with the lessening of build quality - at least that vestige of Sears will live on in more successful companies. Plus, I never did warm up to the Kobalt hand tools at Lowes.
“We’re liquidating ... to get capital to put into our pension plan.“
Imagine that. Actually having to put sufficient assets aside to pay for pensions. Someone should tell Government.
L
It is Stanley and Sears is selling Kenmore on Amazon.
They will be reduced to home customer service and then maybe claw their way back, or not.
My neighborhood Lowes started rolling out Craftsman tool boxes. I asked them what was up and they said Stanley owns Craftsman now and they'll soon be getting the whole line, as well as Kenmore appliances.
I wonder if they're going to continue with Kobalt, which had been Lowes in-store brand?
Take a look at this:
"Part of the delay in getting Craftsman tools into Lowe's is the fact that Stanley Black & Decker is shifting Craftsman production back from overseas plants to U.S. facilities. It has announced plans for a new U.S. factory to build Craftsman products at a location yet to be announced."
Sears’ real problem wasn’t “some MBA”. Their business model doesn’t work. Malls are expensive real estate. That’s fine if you’re Nieman Marcus or Saks or Nordstrom. If you ‘re competing with big box stores which have cheaper real estate and more convenient parking though, you’re dead.
K-Mart gone, replaced by Mervyns and they're gone. Now Toys R Us gone. However, Target is strong in our area, about 4 stores and all crowded. They're expanding in our area. I never saw so much change in store closings at local malls. Wife's favorite women's store, Anthropologie, is now closing near us. Can't count on anything staying the same.
I’m glad Sears sold off Lands End because I like their men’s clothing a lot and their sizes fit well. Just hope they don’t get sucked down when Sears finally goes under.
I’ve had some Harbor Freight tools hold up rather well over the past couple of years too.
How far the Craftsman brand has fallen.
With that being said, I have a cordless Craftsman drill that is 12 or so years old but works and the battery still keeps a little charge.
I think most of the store branded tools are made by a factory in Taiwan. I have noticed their ratchets all appear identical.
The quality is very good tho I still prefer the old Craftsman tools which were made by Western Forge.
Many years ago Walmart carried their own brand which was called “Popular Mechanics”. When they dropped that brand they cleared out all the old ones.
I noticed a nice half inch ratchet set was reduced from $34.96 to $22, then $11. It included a large tool box. One day I was in the Super center in Defuniak Springs and as usual checked the prices on them. I couldn’t because they were all on a high shelf, out of reach.
I finally was able to reach one and took it to a price checker. They were now $5.50. I reached an employee and got him to put all 14 sets in my basket. I am pretty sure an employee had purposely put them out of reach.
Anyway, I got out my Mitotoyo caliper and checked how consistent the prongs were. Every single one tested out as .499 inch. That is remarkable consistency.
Our local Sears has been great for appliances & repair, tires, batteries, lawn and garden equipment. Excellent service after the sale, and folks will miss that when they’re gone.
K-mart...that explains most of the problem right there..
Wasn't it Rosie O'Donnell that was a spokesperson for K-Mart some years ago?? Right after she went to work for them K-Mart stop selling most things that men would be interested in... It seemed that they "feminized" the whole darn store, they have been going downhill ever sense Rosie got involved...
Same here. One or two sales people per floor in the two story store; huge cutbacks in the automotive department hours.
When they bought KMart , I was like, why? Talk about spending good money on usually risky and dubious merger, and that is if Kmart was not the piece of crap it was
They still managed to find 72 stores, to close?
There goes another notch in feminized socially conscious so called businesses. He number of idiots these big companies pay millions to be on their board is amazing
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