Sears, Kmart to Shutter Up to 120 Stores
Officials from the retailer have not yet announced which stores will close.
It remains unclear how many, if any, Sears or Kmart stores in Maryland may close after the parent company of the two retail brands announced plans on Tuesday to shutter 100 to 120 of its under-performing stores.
Sears Holdings Corp. announced the planned closings while noting that comparable store sales at Kmart were down 4.4 percent for the eight-week quarter-to-date ending Dec. 25, and for Sears, sales were down 6 percent through the same period.
The company, which has more than 4,000 stores in North America, reports sales are down 5.2 percent overall for the quarter-to-date, and down 2.6 percent for the year-to-date. Sears Holding stock ended the trading day at $33.38, down more than 27 percent from its opening price.
A list of which stores are to be closed will be listed on www.searsmedia.com when a final decision is made.
Company officials blame sluggish sales at Kmart on a decline in electronics and clothing sales along with lower than anticipated layaway sales. Sears’ decline was blamed on lower electronics and home appliance sales.
"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 Sears Holding Corp. CEO Lou D'Ambrosio in a statement.
"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."
The closings are just the latest step the retailer has taken in recent years as it attempts to keep pace with rivals such as Walmart, Target and Best Buy. Sears Holdings Corp.’s has struggled since it was founded in 2005 when Sears and Kmart merged.
In Baltimore and Harford counties, there are Sears stores at Eastpoint Mall, White Marsh Mall, Harford Mall, Security Square Mall and Hunt Valley Town Center. There are also Kmart stores located in Fullerton and North Point.
In Bel Air, some Sears shoppers were already aware of the announcement Tuesday afternoon.
Patty Hill, of Bel Air, who was leaving the store with bag in hand, said the Harford Mall Sears location is where her family buys all of their appliances.
"I would be really disappointed [if the store closed], I'm not quite sure where I would buy the things they offer," Hill said, later adding, "I would miss it."
Even if the Bel Air location were to close, Hill expressed loyalty regarding the Sears brand.
"If there was another Sears close by, I would go there," Hill said.
Hill said she shops at Sears frequently, and she's not the only one.
"My mom got every single one of my Christmas presents here," Kristen Palm of Bel Air said.
Palm said she likes the shoe selection at Sears.
Gladys Palm, who was shopping with the younger Palm, said that while she doesn't shop much these days, it would be a shame for the store to close.
"It would be missed," Gladys Palm said.
While some customers may maintain loyalty to the brands, others question Sears and Kmart's futures in an increasingly competitive retail marketplace.
“This news tells me that this merger has been a failure,” said Morris Segall, president of the Baltimore-based SPG Trend Advisors, an economic and capital market, research and consulting firm. “Kmart might be a brand whose time has come and past while Sears has not been able to establish where it sits in the current marketplace.
“This announcement will have a negative impact on the economy with thousands of people likely to lose their jobs at a time when we are desperately trying to create them. At a time when holiday shopping appears to be on the rise, it seems like people have just passed over Sears and Kmart.”
According to a Sears Holding news release, the store closures will generate between $140 million to $170 million from inventory sales with additional cash coming in from the sale or sublease of the closed store locations. The retailer also projects it will “record a non-cash charge of $1.6 billion to $1.8 billion in the fourth quarter,” the release continued.