Sears Holdings (SHLD) is throwing in the towel on at least 50 underperforming stores.
The department-store chain last month revealed plans to shut an unspecified number of Sears and Kmart stores across the country this spring, but on Tuesday announced that a “challenging” holiday season caused by a poor performance in the apparel segment had spurred it to accelerate these closings.
The company reported an estimated 7.1% decline in comparable store sales for the three months ended January—Kmart dropped 7.2% and Sears was down 6.9%—and full-year comps fell 9.2%. By comparison, same-store sales slipped 4.4% and 1.8% for the quarter and year ended Jan. 31, 2015, respectively.
To that end, Sears Holdings expects total revenues of $7.3 billion for the fourth quarter of fiscal 2015, down from $8.1 billion in the year-ago period.
“We entered the holiday selling season with key product offerings and promotions intended to build engagement with our members and provide them with the best experience possible,” the company said in a statement. “The holiday selling season proved to be challenging, with historically warm weather and intense competition pressuring margins and driving comparable store sales declines, particularly in our apparel and related softlines businesses.”
Grasping at straws, Sears Holdings said that January 2016 was the best performing month of the fourth quarter because comparable store sales declined by only 4.5%.
“The operating performance of our apparel business has a substantial impact on our overall profitability and in 2016 and future periods, we intend to improve the performance of our apparel business through changes to our sourcing, product assortment, space allocation, pricing and inventory management practices,” the company continued.
By speeding up store closures, as well as continuing to evaluate and optimize its cost structure, including adjusting store-level marketing expenditures and overall staffing levels, the company said it expects to cut costs by between $550 million and $650 million, depending on the overall volume of sales.
In addition, Sears Holdings intends to sell at least $300 million worth of assets during the first half of fiscal 2016, which could include offloading more of its real-estate portfolio.
Last year, the company sold around 235 Sears and Kmart branded properties to Seritage Growth Properties, a real-estate investment trust (REIT), raising roughly $2.5 billion in the process, and it’s been dropping underperforming locations like flies. Its store base has shrunk from the 4,000 it operated on Jan. 31, 2011, to less than 1,700 today.
Sears Holdings will release its official fiscal 2015 fourth-quarter and full-year results on or about Feb. 25.