Sears to accelerate store closing plan

CHICAGO – Sears said it will accelerate plans to close unprofitable stores and will consider additional staff cuts as it tries to stem the red ink after what it called a “challenging” holiday selling season.

Sears Holdings on Tuesday said fourth-quarter sales in stores open at least a year fell 7.2 percent in Kmart stores and 6.9 percent at Sears stores, despite the company entering the holiday period “with key product offerings and promotions intended to build engagement with our members and provide them with the best experience possible,” the company said in a filing with the Securities and Exchange Commission.

For the full year, that measurement of sales fell 7.3 percent at Kmart and 11.1 percent at Sears.

But while spokesman Chris Brathwaite noted Sears wasn’t the only company that struggled during the holiday season, it fared worse than some competitors.

Macy’s saw a 4.7 percent drop in November and December sales compared with 2014 in stores open at least a year. J.C. Penney reported a 3.9 percent increase in sales over that time period, while Kohl’s reported a 0.4 percent increase over 2014 for the full fourth quarter.

The Chicago-area company already had said it would close 50 stores this year, with most shutting down between March and April, said spokesman Howard Reifs. Most of those are Kmart stores where the company opted not to renew leases, he said.

Tuesday, it said the shutdown of unprofitable stores would include – but not be limited to – those locations.

The company said it also would seek to raise at least $300 million by selling other unspecified assets during the first half of the year, but declined to comment further on what assets might be sold. Sears already said it was considering options for its Sears Auto Center business that could include the sale of a portion of the business or the entire operation outright.

This year, Sears said it plans to take actions that would cut its costs by between $550 million and $650 million, following cuts of between $765 million and $790 million in 2015.

Although the company’s appliances business is still a bright spot, the outlook for other goods is dismal, said Pam Goodfellow, an analyst with Prosper Insights & Analytics.

Sears used to rank in the top group of national retailers like Kohl’s, Wal-Mart and Macy’s where surveyed customers said they most often shopped for women’s clothing, Goodfellow said. But it now ranks in the middle of the pack, slightly behind Goodwill, she said.

“They’ve just done nothing to bring in younger shoppers,” she said. “The joke is it’s the place where grandma shops, but grandma shops at Macy’s now.”