Eye on Retail: Sears closings, again
The bleeding isn’t over for Sears and Kmart.
TransformCo., the name of the brands’ new parent company, announced that 21 Sears stores and five Kmart stores will close in late October as the company struggles in a “weak retail environment” and pins its hopes on smaller-format stores. TransformCo. said it could not rule out additional store closings in the near-term as it works to return the company to profitability. Liquidation sales at the 26 locations are expected to begin around Aug. 15
In February, Sears chairman, former CEO and largest shareholder Eddie Lampert via his ESL hedge fund bought most of Sears’ assets, including about 400 stores, out of bankruptcy under a new, private entity, which is now called TransformCo. Lampert is chairman of the company.
“Over the past several months, we have worked hard to strengthen our vendor relationships, return our inventory levels to normal, and improve customer satisfaction and operations; however, we have faced a number of challenges returning our stores to sustainable levels of productivity, including differences with Sears Holdings over our purchase agreement and a generally weak retail environment,” the company said in a statement. “These challenges have unfortunately affected our performance and limited our strategic choices.”
In May, Sears unveiled its next chapter under its new owner, Sears Home & Life, opening three locations. The apparel-free, smaller-sized format (the footprint ranges from 10,000 sq. ft. to 15,000 sq. ft.) is focused on selling major and small kitchen appliances, mattresses, tools, connected home products and home services.
In its statement, TransformCo. said it plans to accelerate the expansion of its smaller store formats, includes opening additional Home & Life stores and adding several hundred Sears Hometown stores after its purchase of Sears Hometown and Outlet closes. Transform announced a deal to acquire the chain, which had been spun off from Sears in 2012, in June.
To see a list of the 26 stores set to close in October, click here.
More Sears and Kmart stores are set to go dark, as the brands’ new parent company, TransformCo, fights to keep the once-bankrupt business afloat.
The company announced on its website Monday evening that 26 additional Sears and Kmart stores will close in late October, ranging from locations in California to Texas to Virginia. Liquidation sales will begin around Aug. 15, the company said. The Sears Auto Centers at certain locations will start closing later this month.
TransformCo added it “cannot rule out additional store closures in the near term.”
“Over the past several months, we have worked hard to strengthen our vendor relationships, return our inventory levels to normal, and improve customer satisfaction and operations; however, we have faced a number of challenges returning our stores to sustainable levels of productivity, including differences with Sears Holdings over our purchase agreement and a generally weak retail environment. These challenges have unfortunately affected our performance and limited our strategic choices.”
Sears Holdings emerged from bankruptcy earlier this year when its CEO at the time, Eddie Lampert, secured a roughly $5 billion deal using his hedge fund ESL to buy the retailer’s assets out of court, keeping about 400 Sears and Kmart locations up and running. The new entity of assets was renamed. And Lampert has since been stripped of his CEO title but still serves as chairman at TransformCo.
As a private company, TransformCo has largely flown under the radar, as it doesn’t have to report quarterly sales reports, which tended to be very dismal for Sears. In May, it opened three “Sears Home & Life” stores — a new format it says it’s testing where it focuses mainly on selling mattresses, appliances and connected home products.
Hundreds of Sears and Kmart locations have gone dark over the years, with more shoppers moving away from the mall and purchasing goods like appliances, apparel and furniture online. And TransformCo still faces those same challenges today.