Sears Holdings Corp. will close 78 stores by mid-September.
The company in February said it would accelerate the closing of unprofitable stores. Now that the company has completed its evaluation, it has decided to shutter 68 Kmart stores and 10 Sears locations. All Sears stores will close by late July, while 66 Kmart stores will go dark at the same time. The remaining two Kmart locations will close in mid-September.
Edward S. Lampert, chairman and chief executive officer of Sears, said, “The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability.” He added that the company is “focusing on our best members, our best categories and our best stores as we work to accelerate our transformation.”
Liquidation sales are expected to start May 12 for Kmart stores, and on April 29 for Sears stores. Sears said it “expects the store closures to generate a meaningful level of cash from the liquidation of store inventory and from the sale or sublease of some of the related real estate.”
Store associates will have the opportunity to apply for open positions at other Kmart and Sears sites. Those that are eligible will also receive severance.
Lampert emphasized the company will “continue to transform as the role of the store evolves to fit the way that members want to shop.”
The company said the evaluation of which stores to shutter included historical and recent store performance, as well as the timing of lease expirations.
At the end of the fourth quarter, the company operated 731 Sears stores and 941 Kmart doors, for a total of 1,672 locations.
The retailer in February posted a widened fourth-quarter loss for the period ended Jan. 30. The loss was $580 million, compared with a loss of $159 million a year ago.
Shares of Sears fell 3.4 percent to close at $18.01 in Nasdaq trading. The company disclosed its plans to close more stores after the markets ended their trading sessions. Shares of Sears rose 6.3 percent in after-market trading to $19.15, indicating that investors were happy with the news about the impending store closures.