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Up to 120 Sears, Kmart stores set for closure

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Between 100 and 120 Sears and Kmart stores will be closed, the retailer said Tuesday, after terrible holiday sales during what is the most crucial time of the year for retailers.

Sears said it has yet to determine which stores will be closed, but there has been a clear shift in where the retailer will devote its resources.

The company, which operates Kmart stores, Sears, Roebuck and Co. and Land's End, has seen rival department stores like Macy's Inc. and discounters like Target Corp. steal customers away. And the economy is putting a sustained financial squeeze on its most loyal customers, those in the middle-income bracket.

In Indianapolis, Sears has full-size department stores at Castleton Square and Washington Square malls. It also has full department stores in Greenwood, Anderson, Columbus, Bloomington and Kokomo.

The company also has three Sears Hardware, one Sears Outlet and 10 Sears Hometown Store locations in central Indiana.

There are five Kmart stores in Indianapolis: 2715 Madison Avenue; 7425 E. Washington St.; 5101 E. Thompson Road; 6780 W. Washington St.; and 7201 Pendleton Pike.

Other central Indiana Kmart locations include Greenwood, Brownsburg, Anderson, Elwood, and Columbus.

The company is moving away from its practice of propping up "marginally performing" stores in hopes of improving their performance. Sears said it will now concentrate on cash-generating stores.

"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business model," said CEO Louis D'Ambrosio. "These actions will better enable us to focus our investments on serving our customers."

Sears would not discuss how many, if any, jobs would be cut.

Sears Holdings Corp., based in Hoffman Estates, Ill., said that the store closings will generate $140 to $170 million in cash from inventory sales. The retailer anticipates additional proceeds from the sale or sublease of real estate holdings.

The retailer had announced numerous closings this year, but this is the largest group of closings to date by far. Hoped-for holiday sales did not materialize.
Same-store revenue fell 5.2 percent to date for the quarter at both Sears and Kmart, the company said Tuesday. That includes the critical holiday shopping period, a time that most retailers depend on for a sales surge that will put them in the black.

Kmart's -percent decline in revenue at stores open at least a year was blamed on diminished layaways and a drop in clothing and consumer electronics sales.

Sears cited lackluster consumer electronics and home appliance sales for its 4.4-percent drop. Sears' clothing sales were flat, while sales of Lands' End products at Sears stores rose in the mid-single digits.

Sears Holdings said that the declining sales, ongoing margin pressure and rising expenses pulled its adjusted earnings lower. The company predicts fourth-quarter consolidated adjusted earnings will be less than half the prior-year period's $933 million. It also anticipates a non-cash charge of $1.6 billion to $1.8 billion in the quarter for a valuation allowance on some deferred tax assets.

This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

Sears Holdings said it also plans to lower its fixed costs by $100 million to $200 million and trim its 2012 peak domestic inventory by $300 million from 2011's $10.2 billion at the third quarter's end.

Sears Holdings has more than 4,000 stores in the United States and Canada.
 

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  • Corporate stupidity
    What do you expect from corporate dimwits who actually bought the cheesy Kardashian line of clothes? As my wife said, "Who was the idiot who brought that stuff into Sears?" Not enough illegal immigrant gals bought them, I guess. Who else would wear clothes like that?
  • Employee
    I am a sears employee and i am just wondering what exactly is going to happen to all of our jobs? it has taken me 2 years just to find employment and i have worked here at sears for almost a year so what do they plan to do with us employees?
  • Like Charlie always says...
    K-mart sux
  • Stagnant
    Sears has gone downhill while Kohl's, Penney's & Target have taken over their market. Interesting that the only part of Sears that saw an increase was the Land's End division.
  • THE DEMISE OF KMART
    From listening to Marketplace tonight on WFYI, I understood why my local K-Mart still looks like the K-Mart of my youth. The hedgefund owners used cash to buy back stock in order to increase stock values in the short term instead of investing in there stores, their brand, and merchandise lines.

    These profiteers only were considering the long-term growth of the retailer and ignoring the condition of the stores and the satisfaction of its customers. Long before Target and Wal-Mart, there was K-Mart. I hope it is still around not just for nostalgia's sake but as an American discount retailer in our all of neighborhoods.

    Marketplace story: http://www.marketplace.org/topics/business/sears-kmart-close-stores-after-dismal-holiday
  • sad, but not suprising
    So I'm thinking Washington Square Sears, and Madison and Pendleton Pike on the K-Marts. Truly, it makes me sad- but out of the category, both K-Mart and Sears probably are last in customer perception of having inexpensive (not cheap) and quality goods.
  • Agree
    The stores' buyers are to blame - there's nothing there I'd want. Walmart has better clothing.
  • No surprise
    If you have been in the Castleton store the past 10 years this is no surprise. What is surprising is they have lasted this long.

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