US-based department store operator Sears Holdings is planning to close 63 stores to curtail losses in the wake of high financial distress.
The company has made this decision as part of its transformation efforts to streamline operations and focus on profitable stores, as it experienced a 12% decline in comparable-store sales during the first quarter of this year.
Of the total 100 non‐profitable stores, the company has decided to close 15 Kmart stores and 48 Sears stores in early September.
Commenting on the company’s transformation efforts, Sears Holdings chairman and chief executive officer Edward S Lampert said: “In a challenging quarter, we continued to focus on our strategic transformation, identifying additional opportunities to streamline operations and adjust inventory and operating expenses, while staying focused on our best members, best categories and best stores.
“As we look to the remainder of 2018 and beyond, we remain committed to restoring positive Adjusted EBITDA and will continue to explore opportunities to unlock the full potential of our assets for our shareholders.
“This includes exploring third-party partnerships involving several of our businesses such as Sears Home Services, Innovel, Kenmore, and DieHard, and gaining further momentum around our new smaller store formats that blend brick and mortar and online experiences.”
The company also plans to offer severance and a chance to apply for open positions at other Kmart and Sears stores to employees impacted by these store closures. Liquidation sales will begin from 14 June at the closing stores.
The company has mentioned that a special committee of the board of directors (The Special Committee) has initiated a formal process to sell its Kenmore brand and related assets, the Sears Home Improvement Products business of the Sears Home Services division, and the PartsDirect business of the Sears Home Services division.
The special committee is currently evaluating an offer from ESL Investments, which expressed interest in acquiring all or a portion of the assets.
Lampert added: “We believe these initiatives, among others, will help us to strengthen the company and better position it for the future.”