Another 43 stores to be shut by Sears, Kmart
Unable to withstand the struggling retail market and the emergence of online retailers like Amazon, American department store chain, Sears Holdings Corporation, will shut 8 Sears and 35 Kmart unprofitable stores by early October this year. The closure of under-performing stores will allow the retailers to focus more on the better-performing stores as well as to return on the path of profitability.
“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. We have made significant progress in our restructuring programme since the beginning of the year and are well on track to achieve our US $ 1.25 billion annualised cost savings target,” said Eddie Lampert, CEO, Sears Holdings.
Sears, which previously announced to close 265 stores this fiscal, has realised that further measures need to be introduced in order to survive in the challenging retail environment. In the first quarter of the current financial year, Sears’ comparable sales had plunged 12.4 per cent, while Kmart had reported an 11.3 per cent drop.
Additionally, the advent of e-retailers and continuous drop in store traffic have further pushed the company to slash its business operations. This strategic move will bring down the total number of Sears stores to around 1,140 from 2,073 about five years back. However, the changes made are expected to build more confidence in the future of Sears Holdings among its vendors and put the company on a more level playing field with its competitors in the retail space.