Sears Stock Falls 1% in Pre-Market on News of Additional Store Closings
Sears Holdings (SHLD) stock is down over 1% in pre-market trading on Wednesday as the retailer plans to close an additional 66 stores. The company will cut underperforming stores, with 49 Kmart stores and 17 Sears stores on the chopping block.
The closings are in addition to the 180 closings announced earlier in the year.
A source close to the matter states that most of the store closings will occur in September. The company has not had an immediate comment on the matter.
The company’s plans from January include the closure of 150 underperforming stores, with 108 of the stores being Kmart. The struggling retailer is trying to turn their falling operations around and sold their iconic Craftsman brand of tools for nearly $900 million.
The company added an additional 18 Kmart locations and 12 Sears locations to their shutdown list in May, bringing the total number of store closures to 180. The additional 66 store closings will bring the total planned store closures this year to 246,
Sears also announced in May that the company will delay repayment of a $500 million loan and has an agreement to repay $100 million of the loan by July. The remaining balance is not slated for repayment until January 2018, with the option of pushing the balance back further to July 2018.
The company’s woes widened earlier in the month when CEO Eddie Lampert got into a disagreement with the supplier of Craftsman-branded products. The terms of their contract were at the center of the dispute, which has since been resolved.
Sears, once the largest department store in the United States, has suffered from falling sales and analysts suggest the company may be facing bankruptcy. The company’s decline has sent shoppers to Home Goods, the biggest beneficiary of the Sears decline, as well as Marshalls and TJ Maxx, according to reports from Cowen & Company.