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Sears Holdings to Close 103 Kmart and Sears Stores

Sears Holdings to Close 103 Kmart and Sears Stores
(Mohamed Ahmed Soliman | Dreamstime/Dollar Photo Club)

By    |   Thursday, 04 January 2018 03:12 PM

Sears Holdings Corp. said on Thursday it was shuttering 103 unprofitable Kmart and Sears stores as it continues to assess the viability of its operations.

The department store operator, which has racked up 24 straight quarters of sales declines, said 64 Kmart stores and 39 Sears stores would be closed between early March and early April this year.

Liquidation sales will begin as early as Jan. 12 at the closing stores, Reuters cited Sears as saying. 

"We will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members," the company said in a statement.

"Sears wouldn't say how many of its employees would be impacted by the closings but did say the majority of the jobs are part-time positions, and eligible associates will receive severance," CNBC reported.

Memento SA last month recommended the retailer consider going private, saying that “excessive” short selling has hammered Sears' stock.

The firm, which serves as investment manager for Switzerland’s Spadone family, also called for an investigation into recent surges in short selling. Memento said in an open letter to Sears’s board that it owns nearly 2 million shares and believes in the long-term value of its stores, brands and employees, Bloomberg reported.

“Sears has the potential for strong financial performance once it addresses a few critical concerns including, among others, the high volume of short-selling activity in its shares,” Memento Chief Executive Officer Alessandro Mauceri said in the letter.

Through Memento is a relatively small investor in Sears, the idea of going private brought a spark of optimism to the battered stock on Thursday. It climbed as much as 5.1 percent to $4.35.

The shares had lost more than than half their value this year, hurt by steadily declining sales at the Sears chain and its Kmart brand. A go-private deal, however unlikely, would bring a payday to investors after years of watching the shares tumble.
‘Constructive Dialogue’

Memento is seeking a “constructive dialogue” with Sears’s board and management. The firm is working with law firm Olshan Frome Wolosky LLP on the effort.

Mauceri also urged Sears to form an independent board committee to safeguard the equity ownership interests of its investors. He also called for the Securities and Exchange Commission to investigate whether Sears’s short sellers -- who place bets that shares will go down -- violated regulations. In the meantime, he says the SEC should temporarily halt short selling in the stock.

Short interest as a percentage of total outstanding Sears shares has risen to almost 49 percent from about 44 percent two months ago, according to data from financial analytics firm S3 Partners. Short sellers borrow shares, sell them, buy them back at a lower price and profit from the difference -- unless the stock rises.

Memento wants Sears to provide “adequate assurances that it is taking the steps necessary to effectively address the urgent problem of naked short selling in its shares by establishing sophisticated internal controls and seeking appropriate regulatory action,” Mauceri said.

The Sears news also came just hours as Macy’s Inc. shares dropped as much as 7 percent on Thursday after it reported only modest growth in holiday sales and said it would close stores and slash thousands of jobs this year, Reuters said.

The 1 percent rise in comparable store sales came after industry watchers forecast a record season for U.S. retailers. Macy’s had said it would keep inventory tight for the holidays as it works to fend off competition from online sellers like Amazon.com Inc.

The department store operator said it would save about $300 million in costs by shuttering 11 stores, cutting and hiring staff, and streamlining areas including human resources. Macy’s spokeswoman Blair Rosenberg said those changes would mean a net loss of some 5000 jobs.

Macy’s shares had surged 44 percent since early November, when it forecast a jump in online sales that fueled optimism for its prospects in the crucial holiday quarter.

(Newsmax wire services contributed to this report).

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Sears Holdings Corp. said on Thursday it was shuttering 103 unprofitable Kmart and Sears stores as it continues to assess the viability of its operations.The department store operator, which has racked up 24 straight quarters of sales declines, said 64 Kmart stores and 39...
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2018-12-04
Thursday, 04 January 2018 03:12 PM
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