Sears CEO Eddie Lampert announces plans to close more Sears, Kmart stores
- Sears announced Friday it will close eight more Sears locations and 35 unprofitable Kmart stores, as the company "continue[s] to focus on [its] best stores and return to profitability."
- "We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs," CEO Eddie Lampert said in a statement.
- Sears stock was down more than 3 percent Friday afternoon.
Sears Holdings on Friday announced plans to shutter more of its stores.
The department store chain, which operates the struggling Sears and Kmart nameplates, said on Friday it will close eight more Sears locations and 35 unprofitable Kmart stores, as the company "continue[s] to focus on [its] best stores and return to profitability."
Sears stock was down more than 3 percent Friday afternoon after the news.
"This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs," CEO Eddie Lampert wrote in a statement.
The latest stores deemed unprofitable by Sears will be shuttered by early October, the company said. Additionally, eligible associates will receive severance and will have the opportunity to apply for open positions at local Kmart or Sears stores.
"We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs," Lampert said.
"[W]e don't make decisions to close stores lightly," he added, saying his goal as chief executive is to make Sears Holdings "more relevant and more competitive for our members and other constituents."
In his Friday blog post on the company's website, Lampert updated readers on Sears' restructuring program. The company has said it wants to achieve $1.25 billion in annualized cost savings this year, as well as reduce the retailer's debt and improve its liquidity.
Lampert said Sears is "well on track" to meet its goals.
Later Friday evening, Sears announced it has entered into an amendment to an existing credit facility, which will provide the retailer an "uncommitted line" of credit, moving forward.
"This facility is intended to provide the Company with the flexibility to generate additional liquidity on an as-needed basis," Sears Holdings CFO Rob Riecker said in a statement.
"This adjustment to our capital structure demonstrates that Sears Holdings will continue to take actions to generate liquidity and manage our business while meeting all of our financial obligations," Riecker said.
Sears also revealed that in June it closed on more than $200 million of real-estate transactions, which helped the company pay down an April 2016 loan, from $500 million to $347 million. Additional net proceeds of $57 million reduced an outstanding balance on Sears' revolving credit facility, the company said.
Some of Sears vendors, meanwhile, have been seen as looking to jump ship and terminate deals with the retailer as rumors of a looming Sears bankruptcy filing continue to swirl. Key vendors, such as Craftsman supplier Western Forge, fear never being repaid.
"As I have said before, the level of support we have from our vendors is an important factor in defining the size of our business and the number of stores we can operate responsibly going forward," Lampert said Friday in regard to this issue.
He said that in the past 12 months Sears has "reached the point" where some of its vendors have trimmed support, and this is thereby putting "additional pressure" on the company.
"Despite this challenge, we have been working and fighting hard to improve our operational performance and streamline our organization," Lampert added.
In June, Sears announced it's trying a new store concept in Texas — a store that only sells mattresses and appliances. The company said it expects to open more smaller-format stores while shrinking its large, less-competitive ones.
It's a rare spot of optimism for the troubled retailer, which warned earlier this year in an annual filing with the SEC that there were doubts about its ability to continue as a going concern.
Read Sears' latest closure list to find out if your store is one being impacted.