With six years of shrinking sales and a wave of maturities coming due in 2018, Sears is in a fight for its life.
Earlier this year, the department store chain cautioned it may not be able to continue as a going concern. But despite that warning — and a widening gap between its assets and liabilities — Sears has made some aggressive moves to reimagine its future. The big bet has been on getting smaller.
"Innovative smaller-format stores continue to showcase our company's unique integrated retail capabilities by combining new technology, our strongest categories and in-store experts," Chief Financial Officer Rob Riecker said Thursday on a prerecorded conference call.
"We intend to open similar innovative concept stores moving forward as we sharpen our focus on new ways to best serve our members," Riecker explained.
Given its steep losses and a widening deficit — which mushroomed to more than $4 billion in the third quarter from $3.4 billion a year ago — to some degree, Sears has little choice but to whittle itself down. But the smaller format stores also may be just the right size for today's shoppers.
Other retailers, including Target and Nordstrom, are also experimenting with scaled-back spaces that can be more profitable per square foot. The tight space forces retailers to make smarter inventory choices, and still can serve as a place to pick up or return online orders.
Sears operates roughly 1,100 locations nationwide. That's after it shuttered about 330 stores so far this year; another 100 are slated to close by the end of the fiscal fourth quarter.