Departmental store chain Sears Holdings has decided to down the shutters on more than 66 of its Stores in a bid to lessen the losses and increase profitability through its other Kmart and Sear stores. The Closing decision covers 17 Sears stores along with 49 Kmart stores, which will cease to be operational by September 2017.
The new closures will be an addition to the list of 180 store shutdowns, which were announced earlier in 2017.
The news of more stores shutting down was first revealed by publication Business Insider. However, Sears and Kmart’s parent company Sears Holdings refused to comment on the news.
Why is Sears shutting down more stores in the US?
Sears, a trusted name in an American household has been a retailing icon for decades. However, in recent years, the company battled financial woes that affected it much more deeply in the recent months. In January 2017, Sears Holdings announced that it would be closing 150 of its stores to retain profitability.
All the stores that were included in the closure list were underperforming and included 108 Kmart locations as well.
Apart from closing down stores, Sears Holdings also sold off its Craftsman tool brand for $900 million to Stanley Black & Decker to stay relevant in the retail business.
Following the closure announcement, the retailer shocked its investors with a Securities and Exchange Commission report, which stated that Sears Holdings would not be able to continue operations until and unless the organization can increase borrowing and get cash from its assets. The announcement resulted in the company’s shares to tumble down by 12.3 percent. Therefore, to stay relevant and survive the storm, the retailer is closing even more stores in the US.
More stores close to retain profitability
However, far from turning its luck around in the incoming months the Sears outlet closure list have grown in numbers.
In May, the company closed down 30 more locations, which included 18 Kmart and 12 Sears ones. The 30 additional locations ranged from Carson, California to Hialeah, Florida. Most of these outlets are expected to stop operation from July as confirmed by the calls made to the retail locations, and according to local media reports.
The US retailer also announced in May that there would be delay in the repayment of its $500 million loan as the company was trying to reduce debt and preserve cash. Following this decision, the company’s subsidiaries have reached an agreement which eprmits them to repay only $100 million of the $500 million loan in July, which was the initial maturity date of the debt.