Sears appears to have plans for closing approximately 50
stores. According to a Sears press release from earlier this week regarding
their fourth quarter performance, they mention, “We will accelerate the closing
of unprofitable stores, including, but not limited to, roughly 50 stores that we
recently announced would be closing in the next few months. We also intend to
continue to evaluate and optimize our cost structure, including optimizing
store-level marketing expenditures and overall staffing levels, and we will be
taking action to reduce our fixed costs, and to improve our inventory management
and gross margin realization.”
In regard to real estate, Sears reported that, “the sale of
266 properties to Seritage raised significant cash for Sears Holdings, which we
used to reduce our debt, fund our pension plan and to absorb operating losses.
While we do have lease obligations associated with the sale-leaseback
transaction with Seritage, we expect the nature of the leases will lead to
substantially reduced lease expense over the next few years. We expect that our
rent obligations will decrease significantly as space in these stores is
recaptured as permitted under the terms of the leases. We separate the reporting
of the Seritage rent expense to allow investors and other stakeholders to better
understand these costs and to allow them to track how the rents decline over
time.” You can learn more about Sears
and the Seritage REIT from our previous blog post on the
subject.
Sears Holdings is clearly having their challenges. We at
Apparel Search hope that the steps they are taking will guide them to a more
profitable future. Let’s hope.
You can read the full Sears Holdings Provides
Fourth Quarter Financial Update press release from the Sears website. If
you wish to support Sears with the performance of their future financial
reports, you can shop for clothing at Sears.
We hope this fashion retailer news helps you learn more about
the apparel industry. Yes, Sears sells other products as well, but we assume
that clothing is their favorite thing to sell.
Thank you for taking the time to read our apparel retailer blog post. We hope that you have found this news about Sears closing a few stores to be informative. If you have comments or questions, please add your thoughts in the discussion area below.
