At Least 24 More Kmart Stores To Close By End Of 2016

Image courtesy of Nicholas Eckhart

At the end of last week, employees at Kmart stores across the country received bad but not entirely unexpected news: their stores are closing by the end of 2016, and they will lose their jobs. We can confirm that dozens of locations in 11 states plan to close on or before Dec. 11, and will most likely add more locations to this list later today or later this week.

“We have been strategically and aggressively evaluating our store space and productivity, and are accelerating the closing of unprofitable stores as we have previously announced,” a Sears spokesman said in identical statements to all of the stores’ respective local news outlets, saying that any store closing is a difficult decision, and that the company hopes that shoppers will make online purchases from Kmart.

How do we know for sure that more closings are coming? Seritage Growth Properties, the publicly traded real estate investment trust to which Sears Holdings has sold many of its current and former stores to raise cash, filed a document on Friday with the Securities and Exchange Commission about how Sears Holdings plans to terminate its leases with 17 stores that had been sold to Seritage.

“Sears Holdings has exercised its right under the Master Lease to terminate the Master Lease with respect to 17 unprofitable stores totaling 1.7 million square feet of gross leasable area,” the document explains.

Those stores could also include Sears or Sears Auto locations, but the Master Lease refers to the agreement under which Sears Holdings leases its stores back from Seritage.

So we know that least 17 26 stores will be closing by the end of the year, and there could be more closings planned in stores that are leased from landlords other than Seritage.

A list circulating over the weekend from Business Insider includes a total of 64 stores, but some of those were based on tips from readers and we haven’t been able to confirm the closings yet.

Sears Holdings will pay Seritage rent on the stores until they close for good, most likely in January, and then will pay the REIT the equivalent of one year’s rent for each store as a termination fee.

What we’ve learned recently is that just because the stores were unsuccessful as Kmarts, that doesn’t mean a new tenant can’t succeed there; the store may need to be divided up or remodeled, but former Kmarts are now thriving in Michigan.

Here are the closings that we can confirm so far: expect to see this list expand.

 

State Town Closing
 AL  Cullman  December
 CO  Craig  December
 HI  Waikele  December
 IL  Springfield  December
 IL  Tinley Park  December
 IN  Elkhart  December
 IN  Lafayette  December
 MA  Great Barrington  December
 MI  Grand Rapids (Byron Township)  December
 MI  Grand Rapids (Plainfield Township)  December
 MI  Jackson  December
 MI  Signal Hills  December
 MS  Natchez  December
 NC  Burlington  December
 NE  Scottsbluff  December
 NY  Binghamton  December
 OH  Canton  December
 OH  Mentor  December
 TN  Oak Ridge  December
 TX  Abilene  December
 TX  Lubbock  December
 VA  Martinsville  December
 VA  Wytheville  December
 WA  Yakima  December
 WY  Cody  December
 WY  Riverton  December

Form 8-K: September 16, 2016 [SEC] (via Business Insider)