Sears Holdings Corp. has store closures in mind for the first quarter.
This story first appeared in the January 15, 2016 issue of WWD. Subscribe Today.
“We will be closing some Kmart and Sears stores in various cities across the country,” a spokesman said. He declined to disclose the number of stores that will be shuttered, noting only that “it’s a very small percentage” of the company’s store count and that the doors impacted will be primarily Kmart sites. As of the third quarter ended Oct. 31, Sears Holdings operated 952 Kmart stores and 735 Sears stores.
“The store closures are part of a series of actions we’re taking to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model,” the spokesman said.
Separately, market and financial sources have voiced concern about whether orders to Sears would be approved by factors. On Thursday, sources said at least one unnamed factor has elected not to approve an order, although a credit analyst said it was likely because the financing firm had no other exposure to the retailer and “didn’t want to get back in.” Factors that are still approving orders to Sears for the most part have been checking orders on a case-by-case basis for several quarters now.
Apparel vendors are concerned that there could be a tightening of credit lines in connection with Sears accounts or a higher surcharge from factors.
A separate Sears spokesman said the company has significant financial flexibility and the means to meet its obligations to vendors. “We’ve had no material interruptions in the flow of goods to our company,” he said. “We have the financial resources to deal with vendors directly,” noting that the company communicates with its suppliers regularly.
He added that “less than 3 percent of our gross inventory is factored, [representing] a very small percentage of Sears Holding Corp.’s overall business.” He also acknowledged that the factoring is in connection with the apparel side of the business where the vendors are typically smaller in size.