If the struggles of the retail industry haven’t been evident enough by Amazon’s (NASDAQ:$AMZN) acquisition of Whole Foods (NASDAQ:$WFM), retail giant Sears Holdings (NASDAQ:$SHLD) just announced that it is closing another 20 if its stores — 18 Sears locations and two Kmarts. The closures were confirmed by Seritage Growth Properties (NYSE:$SRG) in a Securities and Exchange Commission (SEC) filing.
Sears Holdings’ shutdown of 20 locations only adds on to the 260 stores it’s had to close so far this year. The company now has a little more than 1,100 locations still open. The vast amounts of store closures can be largely blamed for the company’s failure to reinvent itself in the wake of rising online retailers like Amazon.
While the company has acknowledged the slim chance of surviving through the wave of changes in the retail industry, it is working to increase that chance by cutting costs as well as utilizing other retail strategies. Eddie Lampert, CEO of Sears Holdings, responded to critics of the company by saying that it will be “fighting like hell” to get through recent turbulences.
Sears Holdings’ fight can be seen by the fact that its cut down about $1 billion in costs so far this year, mostly by closing down stores. It’s also raised some funds by selling Craftsman off to Stanley Black & Decker (NYSE:$SWK) for about $900 million.
Liquidation sales for the 20 closing stores will begin around June 20, and official closure occur by mid-September, Sears announced in a statement.
Addressing its customers on the closures, Sears stated, “We understand that members may be disappointed when we close a store, but our Shop Your Way membership platform, websites and mobile apps allow us to maintain these valued relationships long after a store closes its doors. As a result, we hope to maintain and even grow our relationships with the members who shopped this location.”
USA TODAY confirmed that of the 20 stores set to close, three of them are located in Ohio, another three are in New York, two stores are in Texas, and another two are in Maryland.
The closures will allow Sears Holdings to cut off more of its costs. According to Seritage, Sears Holdings spend around $11.2 million annually in rent for the 20 stores. However, Sears Holdings will owe Seritage one year of rent and one year of annual operating expenses for terminating its lease with Seritage early.
When asked about the situation, a Seritage spokesperson declined to comment.
Although the company has been struggling, Sears Holdings determination and fight to stay alive is one that should impress investors. This is not a company that will go down easily. However, concerns still remain over Sear Holdings’ growth and how it will adapt its strategies during this time.
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