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article imageSears Holdings to close over 100 Sears and Kmart stores

By Leigh Goessl     Dec 27, 2011 in Business
Sears Holdings has announced they are looking to close 100 to 120 Sears and Kmart stores due to a large drop in sales over the past year.
Now the retailer is looking to make some big changes in order to try and strengthen the brand.
According to a Sears Holdings' press release issued today, as a part of the company's strategy, Sears intends to close 100 to 120 Kmart and Sears full-line stores. With this decision, the company expects to generate $140 to $170 million of cash from inventory sales and gain additional cash from the sale/lease of retail space.
Other segments of the retailer's strategy will include reduction of inventory, improved inventory management, reduced fixed costs by $100 to $200 million, and a focus on "more targeted pricing and promotion."
"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model," said Chief Executive Officer Lou D'Ambrosio.
Sears stated in the past they tended to keep lower performing stores open with the goal of strengthening performance, however the company no longer believes this approach to be an optimal way to improve. Instead of this approach, the retailer instead wants to focus on higher performing stores and look to capitalize on those stores by rechanneling efforts rather than try to keep under-performing stores afloat.
About the strategy, D'Ambrosio said, "These actions will better enable us to focus our investments on serving our customers and members through integrated retail - at the store, online and in the home."
CNN Money reported that after Sears made the announcement, pre-market trading remained unchanged, but overall the company shares are down 38 percent year-to-date.
The National Retail Federation reported mid-month record sales for Black Friday, Cyber Monday and an overall increased holiday shopping season, yet stores, such as Sears, are still struggling. Many traditional brick and mortar stores are fighting to remain afloat in a highly competitive environment where ecommerce is booming.
Wall Street Journal said Sears' fourth quarter financials are expected to be published around Feb. 23.
Sears Holdings said a list of the stores which will be slated for closure will be posted at when a decision is made.
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