Sears is expected to close 24 of its stores across the United States in addition to the 166 stores that the company had already announced it would close this year. These actions are a result of the trend in retail in which companies are focusing more on their online platforms than their physical stores.
Business Insider reported that Sears is closing 22 stores and two Kmart stores in 17 states. Most of the stores set to close will do so by mid-July, and liquidation sales will begin by April 27.
Sears, which is in danger of going bankrupt, has cut its total store count in half over the last five years. The retailer has had slow sales and excess floor space at its stores and, as a result, began announcing closures last year.
Howard Riefs, the director of corporate communications for Sears Holdings Corp., said that the company closing down stores is “not an effort solely aimed at cost savings but is part of a strategy we have been executing … as many of our larger stores are too big for our needs.”
In an emailed statement, Riefs said closing the Clearwater, Florida, store was a “difficult, but necessary decision,” though having fewer stores and the “right format” will help them to “bring Sears Holdings to a size and place to meet the realities of the changing retail world.”
The company had 1,002 stores as of early February, down from 1,980 stores in 2013. Sears Holdings’ sales have been on the decline for years, down 45 percent since early 2013.
The retailer’s debt is now over $4 billion, and the company’s annual losses are well over $1 billion. They are now shifting their focus to their Shop Your Way membership platform, websites and mobile apps.
Due to the closing of the stores, Sears gave letters of notice to employees at the affected stores. The number of employees that are being affected is unknown at the time. However, eligible associates will receive severance and have the opportunity to apply for positions at other Sears and Kmart stores.
Sears is also selling 16 properties — mostly in Indiana, Ohio, Missouri and Texas — on leaseback opportunities, meaning that Sears would pay rent to the winning bidders to remain in the space. The liquidation sales will have products with discounts ranging from 10 percent to 80 percent off.
Sears was one of the nation’s largest retailers for a part of the 20th century, but retail has changed dramatically and they have struggled to keep up with
The company has been frequenting the news in the past year for their falling sales and unsuccessful business strategies.
As e-commerce websites such as Amazon lead in online sales, many traditional stores are losing their customers.
To minimize their footprints, numerous retailers have closed down, with more closures and downsizings expected to occur
Macy’s and J.C. Penney are in a similar situation, and both have closed some of their locations. In the past year Bon-Ton Stores Inc. and Toys R Us both went out of business for similar reasons.
In addition to these closures, malls around the United States have been shutting down. When anchor tenants such as Sears leave a mall, other stores try to break their leases or negotiate for cheaper rent, hurting the mall industry.
According to CNN, experts predict that a quarter of American malls will close in the next five years, which is around 300 out of 1,100 malls.
Latest posts by Estelle Saad (see all)
- Times Square welcomes expansive billion-dollar development - December 10, 2018
- Commercial rent control bill aims to protect small businesses - November 12, 2018
- Big Apple Circus isn’t as wondrous as you remember it to be - November 2, 2018