Retailers hit hard in 2017

Posted at 5:30 PM, Jul 07, 2017
and last updated 2017-07-07 17:30:31-04

(RNN) - Sears will be closing eight more stores and 35 Kmart locations by the end of October, the company announced on Friday. 

The company said that eligible employees will receive severance and an opportunity to apply for open jobs at other Sears or Kmart stores. 

Sears CEO and Chairman Eddie Lampert wrote about the decision on Friday, citing a change in shopping habits.  

“Changes in consumer behavior are driving our vision and actions, and we continue to transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members,” he said. “Today, we will initiate the closing of an additional eight Sears and 35 Kmart unprofitable stores as we continue to focus on our best stores and return to profitability.”

He added that the company more than a year ago opened what he called small-format sites in Colorado and Texas. The opening of smaller stores combined with the closing of larger ones is a trend for the company. 

“The smaller store concept allows us to focus on some of our stronger categories, complemented with our Shop Your Way membership program, home services and credit offerings. We expect to introduce additional smaller, specialized concept stores in the upcoming quarters while simultaneously reducing the number and/or the size of larger-format, less competitive stores,” Lampert said. 

He said the company is on track to achieve a goal of $1.25 billion in annualized cost savings.  “We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs and, as a result, we had to absorb corresponding losses in the process. So, it is obvious that we don’t make decisions to close stores lightly,” he said. 

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