Sears Planning Massive Store Closings

H O F F M A N  ESTATES, Ill., Jan. 4, 2001 -- Sears, Roebuck and Co. announcedplans today to close 89 underperforming stores amid a tighteningoutlook for retailers that caused its sales to fall slightly lastmonth.

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

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

Just four of its 860 full-line department stores will beaffected, 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 salesupdate showing a 1.1 percent decline in revenues from comparabledomestic stores during the holiday period—$4.42 billion for thefive weeks ended Dec. 30.

Disappointing Holiday Season

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

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

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

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

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

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

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

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