The billionaire CEO took to the company’s blog Monday to put the rumors to rest, writing that there has never been a plan to close the Kmart business, which currently operates more than 700 stores around the United States.
“In fact, we’ve been working hard to make Kmart a more fun, engaging place to shop, powered by our integrated retail innovations and Shop Your Way,” he wrote. “To report or suggest otherwise is irresponsible and is likely intended to do harm to our company to the benefit of those who seek to gain advantage from posting these inaccurate reports.”
So far this year, Sears has announced plans to shutter more than 130 unprofitable Kmart stores, while an 8-K form filed last month by the retailer’s real-estate investment trust, Seritage Growth Properties, revealed a further 17 store leases will be terminated by January. Some analysts have speculated these leases are on Kmart stores.
“Decisions to close stores are never easy, but we recognize that the way people are shopping is changing significantly,” Lampert wrote, noting the company’s “major investments” in its online and mobile platforms. “We are acting more aggressively and continuing to evaluate stores as leases expire and as other opportunities present themselves that improve the economics of Sears Holdings.”
The company’s net loss bulged to $395 million in its most recent quarter, as comparable store sales at Kmart and Sears Domestic declined 3.3% and 7 percent respectively, leading to a $300 million loan from Lampert’s hedge fund. But shares of Sears (SHLD), down 40.03% year-to-date, rose more than 6 percent Tuesday and by 2.56% in early trading Wednesday.
“Our significant asset base gives us the wherewithal to fund our business, but we don’t intend to use our asset value to support losses,” Lampert wrote, contradicting last month’s claim by Moody’s Investors Service that Sears and Kmart will need to rely on external financing and the monetization of its alternative assets to stay in business. “Focusing on our best members, best stores and best categories means a smaller overall store footprint, and one that still represents one of the largest number of stores and square footage in the United States.”
Lampert pointed out that the retail industry has been “challenging” and while Sears won’t be able to restore profit immediately, the company is committed to improving productivity.
He concluded, “It isn’t easy and there will be bumps along the way, but we have tens of thousands of hard working men and women dedicated to transforming the company and making our members lives better and easier every day.”