Sears to Close 100+ Stores, Lay Off 5,500
In what can't be qualified as surprising news, Sears Holdings Corp announced this morning that it will close more than 100 stores across the country and lay off upwards of 5,500 employees. At least 46 Kmart stores, 30 Sears department stores and 31 Sears Auto Centers are scheduled to close before the end of January.
This is just the latest in a series of moves that Sears has made as it fights to keep its head above water. Earlier this week the retailer announced that it was leasing seven store locations to European fashion retailer Primark in an effort to raise much-needed capital. Prior to that, Sears received nearly $169 million in cash in exchange for selling 40 million shares of its Canadian business, Sears Canada, to hedge fund ESL Investments. (ESL Investments is run by Sears' CEO and largest shareholder, Eddie Lampert.) In May, Sears borrowed $400 million from ESL.
The downward spiral for one of the country's most recognizable retail companies has been in motion for years. Declining store traffic and a lack of innovation online have contributed to quarter-after-quarter of sales losses. Perhaps even more troubling for Sears is that it's not capturing new customers (i.e., millennials), while its core customer is increasingly opting to shop at Wal-Mart and Target, lured away by well-stocked shelves and properly maintained stores.
Has Sears reached a point of no return, its fate sealed to be the next Borders or Circuit City, or is a comeback still possible? What do you think of its latest decision to close stores — a necessary cost-cutting move or a shortsighted money grab that will negatively impact revenues in the long run? Let us know by posting your thoughts in the comments section below.