Sears Holdings (NASDAQ:SHLD) has announced a new round of store closings, this one targeting 43 Sears and Kmart locations. The company says that eight Sears department stores and 35 Kmart discount stores chain will close. The retailer has already announced 265 closings this fiscal year. With these latest closings, the company will end up with 1,140 stores. That is slightly more than half of the number of stores it operated in 2012.
Sears’ latest round of cuts comes less than a month after the last round. That round involved plans to close 20 locations. In a blog post, Sears CEO Eddie Lampert said more closings are coming. Lampert is a hedge fund manager who engineered the merger of Kmart and Sears in 2004.
The company is framing the latest round of closings as a strategic decision. Lampert is trying to reposition the company in response to large-scale shifts in the retail industry and the rise of Amazon. Earlier this year, the company implemented a $1.25 billion cost-cutting plan. The company says it is close to meeting its target.
The company hopes that selling off its underperforming stores will help it return to profitability, reduce debt, and improve its liquidity. Lampert wrote in the blog post, “We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs and, as a result, we had to absorb corresponding losses in the process.” Sears has lost about $10 billion in the last six years.
Despite Sears closing hundreds of weak stores in the last few years, comparable sales have relentlessly continued to fall. Sears reported first quarter results in May showing that its comparable sales were down 12.4 percent at Sears and 11.2 percent at Kmart. In March, Sears acknowledged that there was “substantial doubt” it would be able to survive on its own.
Lampert said in a blog post that the company would add small-format locations. Lampert wrote, “This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs.” The company is testing a new small store format in Texas focused on mattresses and appliances. Further details of the plan have not yet been released.
Sears is not the only retailer that has been announcing store closures lately. J.C. Penney recently announced it would shutter 138 locations, about 14 percent of its stores, and provide 6,000 employees with buyouts. Radio Shack has closed more than 1,000 locations since Memorial Day weekend. Macy’s has said it plans to shut 68 stores.