Sears Holdings Corporation announced on Tuesday that it has plans to close between 100 and 120 Kmart and Sears locations following a rough holiday sales season for their stores.
"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model,” Sears Holdings CEO Lou D'Ambrosio said in a statement.
“These actions will better enable us to focus our investments on serving our customers and members through integrated retail – at the store, online and in the home.”
Sears Holdings, the fourth largest broadline retailer in the U.S., hopes to generate somewhere between $140 million and $170 million by selling the inventory at the closing stores, and will generate additional money by selling or subleasing the real estate they occupy.
Which locations will be closed, however, has not yet been fully determined. Shares of Sears Holdings dropped nearly 19 percent following the announcement, CNN Money reports.
But Sears Holdings isn't the only company feeling a financial strain as of late. On Nov. 2, for example it was announced that Filene's Basement, a retail store and Syms Corp subsidiary that was founded over 100 years ago, had filed for Chapter 11 bankruptcy and would be shutting down operations for good.
Marcy Syms, CEO of Syms Corp, said there were a number of problems that led up to the company's financial strain, including “the worst economic downturn in our lifetimes.”
Kmart and Sears retail stores are, in many ways, a piece of Americana. The creation of each of these chains began over a century ago, and they have both made an impact on life and business in the United States.
Sears began in 1886 when Richard Sears began selling watches in order to make some extra income, according to searsarchives.com. The next year he teamed up with with Alvah C. Roebuck, a watchmaker, and in 1893 Sears, Roebuck and Co. was officially formed. Sears has significantly expanded in both its size and list of products since that time, and is responsible for nationally recognized brands like Craftsman tools and Kenmore appliances.
In 1899, Sebastian Spering Kresge opened a store in downtown Detroit, where he sold all of his goods at the affordable price of five and 10 cents apiece and laid the foundation for what would later transform into Kmart. The first Kresge store was operated by 18 employees, and today Kmart has over 133,000 associates, according to Sears Holdings' website.
Although they are struggling, this most recent test isn't the first time Kmart has had to deal with financial troubles. In January 2002, Kmart and 37 of its subsidiaries and affiliates in the U.S. filed for Chapter 11 bankruptcy. They completed the reorganization process and emerged from bankruptcy 15 months later.
Sears and Kmart merged into Sears Holdings Corporation in 2005.