Sears announces closure of 77 more stores
NEW YORK (CNNMoney) — Sears is closing 77 Sears and Kmart stores and cutting 5,300 jobs. And that’s not even the worst news.
The fact that most of these stores will close before Christmas is akin to raising a white flag, since holiday sales are the lynchpin for any retailer’s entire year.
“They’re not giving anybody confidence that they’re going to be around long-term,” said Allan Ellinger is senior managing partner at MMG Advisors, an investment bank that specializes in fashion and retailing. “It’s sad, these were once among the industry’s leading brands.”
Even the stores that won’t close until after the holidays are already holding going out of business sales rather than gearing up for seasonal promotions.
Fitch recently downgraded Sears Holdings to just above default status, suggesting the company may not have cash to continue beyond 2016. Standard & Poor’s may do the same. S&P analyst Toby Crabtree said the company’s cash crunch is worse than he had anticipated, and that it’s closing more stores than he had expected it to before the end of the year.
The store closing list was first compiled by the web site Seeking Alpha, and confirmed by local news reports in the affected communities. A Sears spokesman declined to comment on the list except to say that the company has notified store employees.
“We stated in our second quarter earnings that we would be closing unprofitable stores as leases expire and in some cases will accelerate closings when it is economically prudent,” said spokesman Howard Riefs. “If a store is not generating a profit, it is straightforward that the store should be considered for closure.”
Forty six Kmart stores will close while the Sears brand will shutter 31 locations, including those that have both a Sears store and Sears auto.
The company reported that it had nearly 1,900 U.S. stores between the two brands as of the end of August, down 166 from a year earlier.