US Sears Holding Company Closes Stores

Tuesday 02nd of December 2008 03:50:01 PM

US Sears Holding Company Closes Stores

In the US, the Sears and Kmart stores have long been a part of the landscape. The general merchandise stores sell everything from appliances to sweatshirts and feature men, women, and children’s clothing along with a large amount of household goods. But big chains like Target and Wal-Mart have seriously impacted Sears and Kmart sales and the recession is causing even more problems for the retailers.

The Sears Holdings Corporation announced it will be closing more stores as it attempts to get the company on firmer financial footing. The corporation currently has an interim chief executive officer, W. Bruce Johnson, who said the holiday shopping revenues are not expected to meet original forecasts. The CEO said the company will be closing 8 additional stores.

Currently the Sears Holdings Corporation owns and operates 3,900 stores in both Canada and the United States. In the third quarter of 2008, reported operating losses were $202 million. November sales did not meet expectations and experienced an 8.7% drop during the month in same store sales. All categories of goods were impacted including home and garden and clothing.

The economic crisis has been difficult on most retailers with operating losses being reported in most industries. Clothing retailers are trying to respond to the declines by instituting policies to attract consumer spending. For example, Sears Holdings Corporation expanded its popular layaway program. In addition, the holding company is in the midst of a management shake-up.

The Sears stock prices are responding favourably to the steps being taken to shore up the company’s financial status. Stock values have declined by two-thirds this year. After the announcement of the store closings though, the stock increased 10%. The company is also planning a $500 million share buyback. Hopefully these actions will help these icon stores remain financially viable through the recession.

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