Over the last two weeks Sears Holding announced plans to shutter 108 Kmart and 42 Sears stores. While these stores collectively generated about $1.2 billion in sales over the past 12 months, they generated an Adjusted EBITDA loss of approximately $60 million over that same period, according to the retailer. "The decision to close stores is a difficult but necessary step as we take actions to strengthen the company's operations and fund its transformation. Many of these stores have struggled with their financial performance for years and we have kept them open to maintain local jobs and in the hope that they would turn around. But in order to meet our objective of returning to profitability, we have to make tough decisions and will continue to do so, which will give our better performing stores a chance at success," said Edward S. Lampert, Chairman & CEO of Sears Holdings.
Sales have continued to be challenging during the quarter to date. Same store sales at Sears and Kmart for the first two months of the fourth quarter have declined in the range of 12-13%, Lampert said.
In order to help facilitate the transformation of Sears from a store-based, asset-intensive business model into a membership-focused, asset-light business model, Lampert said the retailer plans to close an additional 150 non-profitable stores, comprised of 108 Kmart and 42 Sears stores, to stem losses; and to secure a $500 million real estate backed loan, secured by real estate properties valued at over $800 million.
The full list of closings is here.