US-based retailer Sears Holdings Corporation is planning to close 150 non-profitable stores, as well as divest its Craftsman brand to Stanley Black & Decker for $775m.
The moves are a part of the firm’s plan to improve financial flexibility and long-term operating performance. The closures involve 108 Kmart and 42 Sears stores.
Sears plans to generate up to $1bn in liquidity through both a newly entered $500m loan, secured by real estate properties valued at more than $800m, and a previously announced standby letter of credit facility of up to $500m from certain affiliates of ESL Investments.
Sears Holdings chairman and chief executive officer Edward S Lampert said: "We are taking strong, decisive actions today to stabilise the company and improve our financial flexibility in what remains a challenging retail environment.”
"We are committed to improving short-term operating performance in order to achieve our long-term transformation."
“Going forward, Sears will be more focused on our Shop Your Way membership platform, a network with tens of millions of active members, and our Integrated Retail strategy in order to be a more nimble, innovative and relevant retailer that is better able to provide value and convenience to our customers."
While the closures collectively generated approximately $1.2bn in sales over the past year, they generated an adjusted EBITDA loss of approximately $60m during this period.
The retailer expects to generate a significant amount of cash from the liquidation of the inventory and related assets of these stores.
Image: Sears store. Photo: courtesy of Caldorwards4 via Wikipedia.