72 SEARS STORES CALLING IT QUITS
Two located in Bay State
NEW YORK — Sears will close another 72 stores — including two in Massachusetts — as sales shrink and losses grow, an announcement that has become a familiar refrain as the company retrenches.
The beleaguered retailer, which operates Kmart and Sears stores, said it has identified about 100 stores that are no longer turning a profit, and the majority of those locations will be shuttered soon.
The Sears stores in Peabody and at Eastfield Mall in Springfield will close in early September, according to a company announcement.
After this round of closures, the company will have about 800 stores, down from about 1,000 at the end of last year and far below the 2012 peak of 4,000 stores.
Sears also posted a quarterly loss of $424 million and said store closings already underway contributed to a drop of more than 30 percent in revenue. That marks more than five years of straight quarterly sales drops, according to FactSet.
Sales at established stores, a key gauge of a retailer’s health, tumbled nearly 12 percent, down 9.5 percent at Kmart stores and 13.4 percent at Sears.
Rob Riecker, Sears’ chief financial officer, said in a prerecorded call that the company’s stores are “a critical component in our transformation.”
But to meet customer needs and improve financial results, Sears must close poorly performing stores and “focus on our best stores, including our newer smaller-store formats,” he said, according to a transcript of the call.
The latest closings underscore the deep-rooted problems at Sears, which was once a one-time powerhouse retailer that survived two world wars and the Great Depression.
“The demise of Sears has felt like a prolonged drip, drip, drip, as evidenced by the string of quarterly sales numbers,” said Mark Hamrick, Bankrate.com senior economic analyst. “Essentially, it has been injury by a thousand cuts, whether by failing to staff stores to provide customers with good experiences or by failing to stock better quality merchandise in its stores.”
Chairman and CEO Edward Lampert, who combined Sears and Kmart in 2005 after helping to bring the latter out of bankruptcy, has long pledged to save the famed retailer, which started in the 1880s as a mail-order catalog business.
But the stores have remained an albatross. And Kenmore, the retailer’s renowned appliance brand, became the latest potential sale after ESL Investments, the company’s largest shareholder, headed by Lampert, said it might be interested in buying it.