Sears names dozens of the 72 stores it plans to close in the near future
- Sears has identified another 100 unprofitable stores.
- It will begin closing sales at 72 of these stores "in the near future."
- The retailer said it continues to evaluate its store fleet and will make further adjustments "as needed and as warranted."
Sears Holdings said Thursday it will be closing more than 70 additional stores in 2018 as its sales continue to erode, dropping more than 30 percent in the latest quarter from a year ago.
The retailer has identified 100 unprofitable stores in total, and it will begin closing sales at 72 of these stores "in the near future."
"We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted," Sears said in a statement announcing its fiscal first-quarter results.
The department store chain has been caught in a vicious cycle — shuttering weak stores to reduce costs. But even as it closes more stores, sales fall further. In the latest period, Sears said roughly two-thirds of its sales decline was tied to store closures.
The company named 63 locations it plans to close; they are mapped here. Sears will list the additional nine locations in a forthcoming update.
Sears and Kmart operated 894 stores at the end of the first quarter, 381 fewer than it did a year ago. Most recently in January, the embattled company announced the shuttering of 64 Kmart stores and 39 Sears stores, adding to the hundreds of closures that have taken place over the past few years. Some locations are currently being auctioned off online.
CEO Eddie Lampert told CNBC in a recent interview: "We're not liquidating just to liquidate. We're liquidating ... to get capital to put into our pension plan. As opposed to erring on the side of, 'This store might work.' ... If it's not working, we've invested the time, so we've got to close it because we are now jeopardizing this [store] over here."
But still, the losses are mounting. In the first quarter, Sears reported it had a loss of $424 million, or $3.93 per share. Revenue fell more than 30 percent to $2.89 billion from $4.2 billion a year ago.
Same-store sales, a key metric used to monitor a retailer's health, were down 11.9 percent overall. This consisted of a 9.5 percent drop at Kmart stores and a 13.4 percent decline at Sears stores.
Sears' dire financial state has many industry experts thinking the company is on the brink of filing for bankruptcy.
Sears ended the first quarter with $466 million in its cash reserves, compared with $336 million in the prior period.
The retailer burned through $1.8 billion in cash in its operations during 2017, $1.4 billion during 2016 and $2.2 billion during 2015, company filings show. It ended last year with $336 million in its cash reserves, compared with $286 million the previous year, a slight uptick thanks to asset sales.
Sears had roughly $4.3 billion in funded debt as of Feb. 3, 2018, along with unfunded pension and retirement obligations of about $1.6 billion.
In addition to shedding its real estate, Sears currently has an independent committee evaluating a deal where the company would sell some of its other assets, including the Kenmore brand, to Lampert's hedge fund, ESL Investments. Earlier this week, ESL said it received "numerous inquiries from potential partners" that are interested in getting involved in such a transaction.
Lampert noted, as it relates to any future transactions, "speed and certainty ... are critical." Heading into the second half of the year, Sears must now gear up for the 2018 holiday season.
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CLARIFICATION: Sears has provided locations for 63 of the newly planned closures. It will give addresses for the other nine in a forthcoming update.