Sears Holdings Corp. said Tuesday it will close 100 to 120 of its full-line Sears and Kmart stores as it struggles to attract shoppers. Sales for the fourth quarter are off a disappointing 5.2 percent compared with last year.
"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model. These actions will better enable us to focus our investments on serving our customers and members through integrated retail - at the store, online and in the home," said Chief Executive Officer Lou D'Ambrosio in a statement.
Sears shares, which were down 38 percent this year before today, fell 18 percent to $37.65 at 9:42 a.m. in New York.
The company will take a fourth quarter tax-related non-cash charge of $1.6 billion to $1.8 billion.
According to the statement, the all-important fourth quarter is shaping up to be a poor one. Sales at its Kmart stores fell 4.4 percent and Sears domestic stores fell 6 percent for a total decline among all its stores of 5.2 percent, the Hoffman Estates, Ill.-based company said.
Sears is increasingly failing to keep pace since its merger with Kmart in 2005. While Sears' sales declined, overall, US holiday sales will rise 3.8 percent this year, compared with a 5.2 percent advance last year, according to the National Retail Federation.
"Kmart's quarter-to-date comparable store sales decline reflects decreases in the consumer electronics and apparel categories and lower layaway sales. Sears Domestic's quarter-to-date sales decline was primarily driven by the consumer electronics and home appliance categories, with more than half of the decline in Sears Domestic occurring in consumer electronics. Sears apparel sales were flat and Lands' End in Sears stores was up mid-single digits," the company said.
Sears said its earnings excluding certain items would be $933 million in the fourth quarter - half its level of last year.
The company has about 4,000 full-line and specialty stores. It hasn't yet identified which stores will close.