Sears Holdings To Accelerate, Expand Planned Store Closings

The only bit of good news in the most recent financial report from Sears Holdings, parent company of Sears and Kmart, is that the sibling stores had better sales during the holiday season than last year, and not just because they kicked off Christmas in mid-September. Unfortunately, the news isn’t very good other than that: the company is still losing money in its retail business, and plans to speed up its planned store closings.

The company now only announces store closings to local media, so they’re unlikely to put out a revised master closings list. We only counted a total of about 35 planned closings in calendar year 2016 that had been announced to local media, but will let you know if we learn of any changes.

In their update for the last quarter of 2015, the company explains their plans for their network of stores and rewards program as follows:

Our intention is not to borrow money to fund continued operating losses, but instead to provide us flexibility as we transition from a traditional network based model to a more asset light member-centric integrated retailer leveraging our Shop Your Way program.

As far as we’ve been able to translate that from Buzzword to English, that means closing more stores, selling more property, and selling more stuff online. That’s how the company turned a profit on paper last year: selling stores to an affiliated real estate investment trust, theoretically to reinvest that money in their retailing business.

Acknowledging that they don’t need as much sales floor space as they used to, the company notes that they expect to pay less rent to that trust in the coming years as they’re able to “recapture” store space in deals like the ones that have planted Whole Foods or Primark stores as new neighbors to Sears in extra space that it no longer needs.

That’s a good start: the next step will be to start selling things that customers actually want and need.

Sears Holdings Provides Fourth Quarter Financial Update [Sears Holdings]
Sears Holdings Provides Fourth Quarter Financial Update [SHC Speaks]
After Challenging Holiday, Sears to Speed up Store Closings [Associated Press]