Sears Holding Corporation will close up to 120 stores, including those within its Kmart chain and its namesake Sears, to combat falling sales and expense increases. The move is expected to generate $140-170 million in additional cash proceeds.
In the period ending Dec. 25, sales were down 4.4 percent for Kmart and 6 percent for Sears. Kmart’s declines were driven by shrinking sales in the consumer electronics and apparel categories, while Sears reported declines in the consumer electronics and home appliance categories.
“Given our performance and the difficult economic environment, especially for big ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base and accelerate the transformation of our business model,” says Lou D’Ambrosio, chief executive officer for Sears Holding Corporation. “These actions will better enable us to focus our investments on serving our customers and members through integrated retail–at the store, online and in the home.”
Sears will also look to reduce peak domestic inventory by $300 million in 2012; improve inventory management, targeted pricing and promotions; and reduce fixed costs by $100 million.