Sears Holdings said late Thursday that it plans to shut 78 stores in 27 states, including 10 Sears stores. All of the Sears stores and virtually all of the Kmart stores will close in late July. Two Kmart stores will close in mid-September.
The move comes after an assessment of the store portfolio that examined historical and recent store performance, as well as the timing of lease expirations, Sears Holdings said. The company had announced in February that it planned to step up the closing of unprofitable stores.
“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,” chairman and chief executive officer Edward Lampert said in a statement. “We’re focusing on our best members, our best categories and our best stores as we work to accelerate our transformation.”
Kmart and Sears stores slated to be closed will begin liquidation sales on May 12 and April 29, respectively, Sears Holdings reported. Eligible associates impacted by the store closures will receive severance and have the opportunity to apply for open positions at area Kmart or Sears stores.
Sears Holdings said that the cash it expects to generate from the liquidation of store inventory and the sale or sublease of some of the real estate, along with more than $1.2 billion in debt financing arranged earlier this month, will provide the capital needed to execute its transformation and meet its financial obligations — moving the company closer to its 2016 objective to restore profitability.
“Sears Holdings will continue to transform as the role of the store evolves to fit the way that members want to shop,” Lampert added. “Through our continued investments in Integrated Retail, our stores are a critical component of our strategy as we provide our members with industry-leading innovations such as Meet with an Expert, In-Vehicle Pickup and Return and Exchange in Five.”
As of its 2015 fiscal year-end on Jan. 30, Sears Holdings operated 1,672 full-line and specialty retail stores under the Sears and Kmart banners in the United States. That includes 941 Kmart stores, with 697 in-store pharmacies, in 49 states, Guam, Puerto Rico and the U.S. Virgin Islands.