Sears has had an extremely difficult last few years, marked by hundreds of locations closing nationwide and sales figures that continue to trend downward. But, according to chief financial officer Rob Riecker, the company may still have a future left in smaller stores specializing in mattresses, appliances and car services.
The hope is that narrowing its focus will help Sears push itself back on track after a long and expensive decline, according to a prerecorded call release to accompany the firm’s Q3 earnings, which were released earlier this month.
The company’s new apparel-free locations are opening across the nation, Riecker noted, and Sears appliance and mattress stores can now be found in Pennsylvania, Hawaii, Colorado and Texas as of earlier this year. It also recently opened two DieHard Auto Centers.
“We intend to open similar innovative concept stores moving forward as we sharpen our focus on new ways to best serve our members,” Riecker said.
Sales at existing Sears stores in the U.S. plunged 17 percent in Q3, and subsidiary Kmart’s sales were reportedly down 13 percent. Riecker explained the closing of pharmacies in Kmart stores as well as cutting back on consumer electronic offerings in Sears and Kmart locations represented an additional blow to sales figures.
At the end of the quarter, Sears Holdings Company had 1,100 Sears and Kmart locations — 26 of which are specialty stores — down from 1,500 locations a year ago. Cash proceeds from closing stores will be put toward reducing debt, including a $400 million term loan balance and $263 million real estate loan.
Edward Lampert, Sears’ CEO, has helped fund the company in its downturn. Sears has approximately $3.3 billion in long-term debt, with short-term loans from Lambert’s hedge fund. Sears shares, which have plummeted 55 percent this year, were up 14 percent in pre-market trading Thursday.