Sears Planning Massive Store Closings

Sears, Roebuck and Co. announced plans today to close 89 underperforming stores amid a tightening outlook for retailers that caused its sales to fall slightly last month.

The move will cost about 2,400 Sears employees their jobs.

Stores targeted for closing were mostly among Sears’ 2,100 specialty retail locations, including 53 National Tire and Battery stores and 30 hardware stores.

Just four of its 860 full-line department stores will be affected, in Voorhees, N.J., Scottsdale, Ariz., Owings Mills, Md., and Homestead, Fla. Two Sears Auto Centers are included.

The Sears announcement comes on the heels of another sturdy American retail institution giving notice that it would close. On Dec. 28, retailer Montgomery Ward, founded in 1872, said that after 128 years in business, it would close all 250 of its stores. It was the first U.S. mail-order house to sell merchandise. Sears Roebuck wasn’t founded until 1886.

The closings were announced as Sears released its monthly sales update showing a 1.1 percent decline in revenues from comparable domestic stores during the holiday period—$4.42 billion for the five weeks ended Dec. 30.

Disappointing Holiday Season

“Like other retailers, general industry softness and difficult weather conditions dampened our holiday season sales,” said Alan Lacy, Sears’ new chairman and chief executive officer.

The closings are to be made in the first quarter of 2001. They follow up on Lacy’s declaration two months ago after taking over from Arthur Martinez that the key to turning the struggling company around was to do “fewer things better.”

“Our actions reflect our heightened focus on productivity and returns,” Lacy said in a statement today. “By closing under-performing NTB and hardware stores we will enhance the profitability of Sears off-the-mall businesses.”

Sears also signaled it may exit the termite-pest control business. The company said it is taking a one-time charge of about $115 million in the fourth quarter due to Sears Termite and Pest Control, citing continuing losses.

Lacy said the retailer is “evaluating strategic options” for that unit, noting that it is a non-core business for Sears.

Sears has struggled with apparel sales for years, but despite weak holiday numbers, the company said sales of appliances, sporting goods, lawn and garden items, footwear and home fashions were all strong over the holidays, while Sears Tire Group and The Great Indoors both showed double-digit increases.

Sears stock rose 94 cents to $36.97 this afternoon on the New York Stock Exchange.

The job cuts affect 1,000 hardware employees, 765 tire and battery employees and 640 in full-line stores, Sears spokeswoman Jan Drummond said.

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