Sears has announced a new financing lifeline and will be scaling back costs as it attempts to return to profitability. The company is also closing more stores, according to reports from Bloomberg.
It is a format Sears has adopted often over the last several years, as it saw sales tank and foot traffic evaporate. The latest iteration rang out yesterday, with the announcement that it has raised another $100 million in financing and will be slashing $200 million in annualized costs through measures other than store closures.
Stores will be closing, though, and Sears announced this morning that it has plans to shutter 103 additional stores in 2018. Sixty-four of them will be Kmart stores and 39 are Sears-branded. Those closures come in addition to 63 Sears/Kmart closures already on the books for the end of the month, and the newly announced round is set to begin between March and April.
“Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size,” the company said in a statement. “In the process, as previously announced, we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members.”
The news follows a Wednesday (Jan. 10) announcement that same-store sales dropped between 16 and 17 percent year-over-year at Sears and Kmart chains during the holiday season. That would be bad news in any environment, but is particularly glaring considering the otherwise strong season.
And, it’s not going to get easier. JCPenney has all but announced its expansion into the appliance business, Walmart’s strength remains constant and even Target has managed to get a turnaround underway.
Sears’ issues include $4.3 billion in outstanding debt as of the end of Q3 2017, approximately $1.5 billion of which comes due this year.