In the face of continued sales declines, Sears Holdings (NASDAQ:SHLD) is looking to accelerate the closure of unprofitable stores, choosing to invest in other aspects of its business.
The company released fourth quarter financial results this week that included comparable store sales declines of 7.2 percent at Kmart stores and 6.9 percent at Sears. For the full year, same-store sales dropped 7.3 percent at Kmart and 11.1 percent at Sears.
Management noted that the fourth quarter declines marked an improvement.
Sears blamed warm winter weather and low demand for cold-weather apparel leading up to the Christmas holiday.
"We entered the holiday selling season with key product offerings and promotions intended to build engagement with our members and provide them with the best experience possible," noted a company statement. "The holiday selling season proved to be challenging, with historically warm weather and intense competition pressuring margins and driving comparable store sales declines, particularly in our apparel and related softlines businesses."
"Based on this performance, we are taking further actions to accelerate our transformation, which is focused on our Shop Your Way membership program and our Integrated Retail offerings. We will accelerate the closing of unprofitable stores, including, but not limited to, roughly 50 stores that we recently announced would be closing in the next few months."
Sears will also implement more cost-cutting at the store level, including marketing and staffing.
"Our intention is not to borrow money to fund continued operating losses, but instead to provide us flexibility as we transition from a traditional network-based model to a more asset light, member-centric integrated retailer leveraging our Shop Your Way program," according to the company.
Sears has been focused on growing its Shop Your Way membership program and its online marketplace platform.
-See this Sears press release
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