Sears to close more Kmarts
Smaller- than- expected loss for retailer; 28 more Kmarts will be closed
Sears Holdings said Thursday it would close another 28 Kmart locations as it continues its cost- cutting campaign, again making it the poster child for the precipitous decline of the American department store.
The company also posted declining sales and profits, but the results were better than analysts expected and led to a brief surge in its stock price before closing at $ 8.55, down 2 cents.
The Kmart closures add to a list of 330 Sears or Kmart locations shuttered or set to be closed later this year as the retailer seeks stability.
The latest batch, according to a list released by Sears Holdings, stretch from Allentown, Pa., to Bellflower, Calif.
The company, which will have more than 1,200 stores after the closures, said in a public filing this year it believes it has at least another 12 months of cash to continue operating.
Sears is betting on a customer loyalty program called Shop Your Way to help lead a turnaround. In addition to new ways for members to earn points, Sears will analyze members’ past purchases and preferences to tailor its
suggestions. Sears also won investors’ favor with a deal announced in July to sell its Kenmore brand appliances on Amazon.
Sales at Sears and Kmart stores open at least a year, a key metric in the retail industry, tumbled 11.5% for the period, the company said Thursday. S& P Global Market Intelligence analysts had estimated those sales would decline 7.1%.
With many retailers shuttering stores as shoppers increasingly browse online, Sears’ latest round of closures was not unexpected, analysts said.
It “strikes me more as good store hygiene rather than a foreshadowing of another round of mass closures,” said Greg Portell, lead partner in the retail practice of A. T. Kearney, a global strategy and management consulting firm. “It is good for a retailer to always be challenging their footprint.”
But Neil Saunders, managing director of GlobalData Retail, sees continuing store closures as more ominous.
They “signal that Sears is broken and that increasing numbers of people do not want to shop there,” he says, adding the company needs the money generated by sales of its real estate to stay afloat.
Sears posted a net loss of $ 251 million for its fiscal second quarter ended July 29, down from a loss of $ 395 million in the same quarter in 2016. It beat S& P’s projection of $ 266 million. Fewer stores helped lead to revenue dropping 23% to $ 4.37 billion, better than S& P’s predicted $ 4.21 billion.