CHICAGO, Sept 7 (Reuters) – Sears Holdings Corp closed eight of its large gay and 35 Kmart stores to cut costs and square footage in order to return to profitability, said Eddie Lampert, CEO Friday.
Store closures add up to 150 announced by the company in January. Once the largest US retailer, Sears has struggled with years of losses and declining sales as buyers moved from the Web mall. The company said in February that it would cut costs this year of at least $ 1 billion.
“This is part of a strategy to address both unprofitable store losses and reduce square footage other stores because many of them are simply too large for our current needs,” wrote in Lampert published in the blog. (Bit.ly/2u03gDc)
A Sears spokesman declined to say how many jobs would be lost during the closure of these stores. He said that eligible employees would receive severance pay and may apply for open positions in the Sears or Kmart stores.
Lampert said Sears hopes to open smaller stores while reducing both large and less competitive. He said Sears was on track to meet its cost reduction targets.
“We have reached a point in the last 12 months, in which some of our suppliers have reduced their support, which has put additional pressure on our business,” Lampert said.
Suppliers from Sears to Reuters in March that doubled on defensive measures such as declining shipments and seeking better payment terms to protect against the risk of non-payment.
Lampert, in a version of the blog post updated Friday afternoon, added that Sears had modified its second line of credit assessment to provide additional borrowing capacity of $ 500 million and sold more than $ 200 million in real estate, Which has allowed Sears to repay part of its mortgage.
Sears said in a separate statement that the Lampert hedge fund, ESL Investments Inc., controls an entity that lent the money as part of the facility, and that ESL intends to participate in the facility as a lender.
In addition to having more than 48 percent of Sears, Lampert and ESL – through its affiliates – have provided debt financing to the company several times since being appointed Managing Director in 2013. (Richa Naidu David Gregorio and Cynthia Osterman)