Sears Holdings Corp. (NASDAQ: SHLD), owner of Sears and Kmart stores, said Thursday it plans to close 28 Kmart locations, in another sign the venerable retailer’s financial condition is deteriorating.
The announcement about the store closings is in addition to earlier announcements from the Hoffman Estates, Illinois-based retailer that it has shuttered 180 Sears and Kmart stores this year and will close 150 more stores by the end of the third quarter.
The announcement also coincided with Sears reporting fiscal second-quarter financial results that underscored the company’s difficulties. The retailer said overall sales at stores open at least a year — a key retail industry metric — declined 11.5% year over year. Kmart’s comparable store sales decreased 9.4%, while Sears comparable store sales declined 13.2%.
Net loss attributable to Sears narrowed to $251 million, or $2.34 a share, from $395 million, or $3.70, from the same period a year ago. Excluding one-time charges, the retailer lost $1.16 a share.
Total revenue in the period ended July 29 slid to $4.4 billion from $5.7 billion in the prior-year quarter, with store closures contributing to approximately $770 million of the decline, according to the company.
Sears is afflicted with the same ills as retail peers Macy’s and J.C. Penney, as falling foot traffic at malls and the migration to e-commerce devastates the retail industry. The company said in a statement:
The retail environment remained challenging, with continued softness in store traffic and elevated price competition. … We continued to focus on streamlining our operations, reducing inventory and operating expenses, and are taking incremental actions to further improve the Company’s performance.
Sears said that July was the best month for the quarter for the company in terms of comparable sales, “as the restructuring program actions, including the closing of unprofitable stores, have begun to take effect.”
“We are making progress on the strategic priorities we outlined earlier this year and remain focused on returning our Company to profitability,” Sears Holdings Chief Executive Officer Eddie Lampert said in a statement.
Sears took the business world by surprise in July when it announced its agreement with Amazon to launch Kenmore products on Amazon.com. The company said at the time that it expects the agreement to “significantly expand the reach of the Kenmore brand.”
Shares of Sears climbed 8% to $9.25 Thursday morning. Their 52-week trading range is $5.50 to $14.80.