Published reports said the stores slated to be shut are in 28 states and that parent company Sears Holdings Corp. had recently informed Kmart employees of the planned closures. Sears Holdings had not announced the store closings, which reports said are expected to occur in December.
The news marks the second sizable round of Kmart closings announced by Sears Holdings this year. In late April, the company unveiled plans to shut 78 stores in 27 states, including 68 Kmart locations and 10 Sears stores. All of the Sears stores and almost all of the Kmart stores were shut in July, and two Kmart stores were set to be closed in September.
Credit rating agency Moody’s last week downgraded Sears Holdings’ liquidity rating and singled out the challenges faced by Kmart.
“It remains uncertain if the company’s operating strategies will stem its continued losses and be sufficient for its cash burn to approach break-even levels,” Moody’s stated. “While the company maintains a sizable asset base, its debts are significant, with approximately $3.5 billion of funded debt as well as an unfunded pension and post-retirement obligation of $2.1 billion. The ratings also reflect our view on the uncertainty of the viability of the Kmart franchise, in particular, given its meaningful market share erosion.”
As of July 30, Sears Holdings had 1,592 domestic stores overall, including 883 Kmart stores (including more than 500 pharmacies) and 709 Sears locations.