Sears to close 8 Sears and 35 Kmart stores
Sears to close 43 more stores to cut costs
Fri Jul 7, 2017 | 6:57pm EDT
Sears Holdings Corp is closing eight of its namesake
department stores locations to cut costs and square footage in an effort to
return to profitability, Chief Executive Officer Eddie Lampert said on Friday.
The store closings are in addition to 150 the company
announced in January. Once the largest U.S. retailer, Sears has struggled with
years of losses and declining sales as shoppers have shifted from the mall to
the web. The company said in February it would cut costs this year by at least
$1 billion.
Shares of Sears fell as much as 4.8 percent in afternoon
trading.
"This is part of a strategy both to address losses
from unprofitable stores and to reduce the square footage of other stores
because many of them are simply too big for our current needs," Lampert
wrote in a blog post. (bit.ly/2u03gDc)
A Sears spokesman declined to say how many jobs would be
lost from these store closures. He said employees who are eligible would
receive severance and be able to apply for open positions at area Sears or
Kmart stores.
Lampert added that Sears expects to open more
smaller-format stores while shrinking its large, less-competitive ones. He said
Sears was on track to meet its cost-cutting targets.
"We reached the point in the past 12 months where
some of our vendors have reduced their support, thereby placing additional
pressure on our business," Lampert said.
Sears suppliers told Reuters in March they were doubling
down on defensive measures, such as reducing shipments and seeking better payment
terms, to protect against the risk of nonpayment.
Lampert, in a version of the blog post updated on Friday
afternoon, added that Sears had amended its second line credit facility to
provide up to $500 million in additional borrowing capacity and had sold over
$200 million in real estate, helping Sears pay down part of its real estate
loan.
Sears said in a separate statement that Lampert's hedge
fund, ESL Investments Inc, controls one of the entities that has loaned money
under the facility, and that ESL is considering participating in the facility
as a lender.
As well as owning over 48 percent of Sears, Lampert and
ESL - through its affiliates - have provided debt funding to the company
several times since he was appointed CEO in 2013.
(Reporting by Richa Naidu; Editing by David Gregorio and
Cynthia Osterman)
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