Sears Holdings Corp. said it has identified 100 non-profitable stores and that 72 locations would begin store closing sales shortly.
The 72 stores are on top of the 103 locations the company said it was shuttering back in January. The new store closures are not a surprise since chairman and chief executive officer Edward S. Lampert has said that the company would continue to close stores as it right-sizes the store count and transformation to a member-focused business.
The store closures were revealed with the company’s first-quarter results. Sears Holdings also said, “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.”
For the first quarter ended May 5, Sears said the net loss was $424 million, or $3.93 a diluted share, against net income of $245 million, or $2.29, in the year-ago quarter. Last year’s quarter included a gain of $492 million in connection with the company’s sale of its Craftsman brand for $900 million.
Total revenues were down 31.2 percent to $2.89 billion from $4.20 billion, with the drop due to both declining sales and store closures during fiscal 2017. Merchandise sales fell 33.6 to $2.21 billion from $3.33 billion. Comparable-store sales fell 11.9 percent, or down 9.5 percent at Kmart stores and down 13.4 percent at Sears stores. Sears said that although total comps sales were down, the company “did experience positive comparable-store sales at both Kmart and Sears in several categories, including apparel, footwear and jewelry.”
Lampert said, “In a challenging quarter, we continued to focus on our strategic transformation, identifying additional opportunities to streamline operations and adjust inventory and operating expenses while staying focused on our Best Members, Best Categories and Best Stores.”
The chairman said the company’s key priorities are its Shop Your Way membership program and Integrated Retail Strategy. He added that the company remains committed to restoring positive adjusted EBITDA. The company continues to explore third-party partnerships for its businesses, such as Sears Home Services and its Kenmore and DieHard brands.
Lampert is also chairman and ceo of ESL Investments, a hedge fund. Together, the two own about a 70 percent stake in Sears Holdings. In April, ESL sent a letter stating it is interested in acquiring certain Sears Holdings assets. The company said on Thursday that its Special Committee continues to evaluate ESL’s non-binding offer.