Following a “comprehensive evaluation” of the company’s portfolio that took into account both historical and recent performance as well as the timing of lease expirations, 68 Kmart and 10 Sears stores will shutter this summer.
According to a statement, all of the Sears stores and nearly all of the Kmart stores will close in late July; the remainder will close in mid-September. Eligible associates impacted by the closures will receive severance. They will also have the opportunity to apply for open positions at nearby Kmart or Sears stores.
In addition to the store closures, a person familiar with the matter told Sourcing Journal that the company also plans to shut its New York design office in July as part of a strategy to reduce costs and consolidate the team in San Francisco, where its West Coast apparel office is located.
It’s not yet clear how many employees will be laid off.
“The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability,” said Edward Lampert, the company’s majority shareholder, chairman and chief executive officer. “We’re focusing on our best members, our best categories and our best stores as we work to accelerate our transformation.”
Sears Holdings said it expects the closures to generate a “meaningful” amount of cash from the liquidation of store inventory and from the sale or sublease of some of the related real estate. Coupled with more than $1.2 billion in debt financing raised earlier this month (with the help of Bill Gates), the company said it’s on the path towards restored profitability.
The affected Kmart and Sears stores will start their going-out-of-business sales on May 12 and Apr. 29 respectively. Click here for a complete list of the closing stores.