As Sears Holdings grapples with falling sales, the retailer is expecting to close an additional 72 stores. Those planned closures are in addition to the hundreds of brick-and-mortar locations the retailer has already shuttered, The Wall Street Journalreported.
The retailer faces competition from Amazon, Walmart and other retailers. In the latest quarter, the company’s sales declined once again — in line with recent trends: Merchandise sales declined more than 30 percent to $2.2 billion. The company has reported sales declines dating back to the third quarter of 2011. In addition, same-store sales declined by 13.4 percent. Store counts are down as well — the company has about 900 stores as of May 5. At the same time in 2017, the retailer had nearly 1,300 locations.
The news comes as Sears Chief Executive Edward Lampert’s hedge fund was interested in buying multiple units from the embattled retailer. ESL Investments was interested in purchasing the company’s Parts Direct and home improvement businesses. The fund was also possibly interested in the retailer’s Kenmore brand and was on board to submit a proposal for the unit. In addition, ESL had said it could buy Sears’ real estate. If that were to happen, Sears could, in turn, lease the stores to keep them running. Such an arrangement could provide cash to the struggling retailer and prevent a bankruptcy filing.
“In our view, pursuing these divestitures now will demonstrate the value of Sears’ portfolio of assets, will provide an important source of liquidity to Sears and could avoid any deterioration in the value of such assets,” Lampert had written in a letter to the board.
Over the last several years, Sears has seen its sales tank and foot traffic evaporate. In January, the retailer announced that it raised another $100 million in financing and will be slashing $200 million in annualized costs through measures other than store closures. Stores will be closing, however, and Sears said that it plans to shutter 103 stores in 2018.