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Sears Shuts Down New York Design Office

Sears is ceasing its East Coast creative operations.

The U.S. retailer closed its Manhattan design office on Wednesday and an estimated 200 people were affected by this loss, WWD reported.

Located at 75 Varick Street in SoHo, the company’s design office has been operating since 2006 when Sears Holdings chairman Edward S. Lampert, set it up in part to prove critics wrong about the company’s margins and merchandising abilities. Both Sears and Kmart apparel design teams worked at the location, where proprietary brands, such as Covington, were established.

The company’s decision followed Sears’ announcement that it would shutter at least 50 stores this year and revamp its business strategy. This summer, 68 Kmart stores and 10 Sears stores will be closing and holding going-out-of-business sales.

Sears also said shutting down the New York design office will allow the company to reduce costs and reassess its place in today’s competitive retail market. Current design teams will be relocated to San Francisco, where the company’s West Coast apparel office is located.

After experiencing considerable financial difficulties in recent years, Sears has hopes that store liquidations will bring in substantial cash to help restore profitability. It is unclear what the company plans to do with employees in other business departments at the end of this year.