Sears is Closing More Stores Than Expected
Famous American chain of department stores, Sears Holdings Corp, is closing another 72 stores, in addition to more than 100 closings announced earlier this year.
The Illinois-based company is shuttering 16 Sears stores, 49 Kmart stores, and seven auto centers. The stores are expected to close in September. Following these closures, the company’s total operational store count will fall to around 1,200 stores. Just five years ago, the total store count stood at more than 2,000 stores. (Source: “Sears is closing 72 stores — here’s the full list,” Business Insider, June 6, 2017.)
Sears continues to add more stores to its long list of closures this year. Beginning this year, Sears had announced that it will be shutting down 150 of its stores. In May, the company added more than two dozen additional stores to that list, taking the count to over 180. (Source: “Sears is quietly closing more stores than it said it would — here’s the list,” Business Insider, May 15, 2017.)
The latest round of announced closings will push the total count to more than 250 shutdowns so far in 2017.
The store closings are part of the company’s efforts to trim its costs. Beginning this year, the company promised to cut its costs by $1.0 billion and reduce its debt by $1.5 billion. (Source: “Sears Vows to Cut $1 Billion in Expenses,” The Wall Street Journal, February. 10, 2017.)
At the same time, management has been taking some dire actions to turn the business around. The company has consolidated the back-end operations of its Sears and Kmart brands and is closing its underperforming stores.
Sears was once a popular household name in America, although it started losing sales in recent years as store traffic fell. Much of its business woes are owed to the rise of e-commerce retailers like Amazon.com, Inc. As more Americans choose to shop online, brick-and-mortar retailers feel pressured across the board.
At the same time, competitors like Wal-Mart Stores Inc and Target Corporation are aggressively investing in e-commerce to push up their online sales. Sears, on the contrary, has failed to do so in a timely manner.
Shareholders are now worried about whether Sears will be the next retailer to head for bankruptcy protection.