BUSINESS
05/31/2018 11:29 am ET

Sears To Close Additional Stores As Sales Continue To Drop

The mall staple has already closed hundreds of stores over the last year.

May 31 (Reuters) ― Sears Holdings Corp reported a near 12 percent fall in quarterly comparable-store sales on Thursday and said it will close 72 more underperforming stores in an effort to stem growing losses.

Shares of the struggling department store operator, which have lost nearly all its in the last five years, fell 10 percent to $2.89 in premarket trading.

Sears said on Thursday it had identified 100 non-profitable Kmart and its namesake outlets and would shut 72 of them by the end of the third quarter.

The company had a total of 894 stores at the end of its first quarter, 381 fewer than it had at the same time last year.

“While we had a challenging first quarter, we remain focused on improving our financial performance and enhancing our liquidity,” Sears Chief Executive Officer Eddie Lampert said.

Earlier in May, the company formed a special committee to explore the sale of its Kenmore appliances brand, home improvement products and parts direct business. The company said on Thursday it would not further comment on the process.

Lampert said in April his hedge fund ESL Investments Inc would bid in any sale of these assets.

Sears has also suffered from falling sales over the past few years as a shift towards online shopping hit the retailer more than brick-and-mortar companies and the company last year flagged doubts about its ability to continue as a going concern.

“The additional 100 store closures announced today is another effort to streamline in the face of its shrinking core operations,” Moody’s Vice President Christina Boni said.

“Continued efforts to enhance liquidity will be necessary to fund its ongoing operating losses.”

Net loss attributable to the company was $424 million, or $3.93 per share, in the first quarter ended May 5, compared to a profit of $245 million, or $2.29 per share, a year earlier.

The year-ago quarter had a $492 million benefit related to the sale of Sears’ Craftsman brand.

Revenue fell 31.2 percent to $2.89 billion in the reported quarter.

Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta

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