Lackluster holiday sales push retailer to close Sears, Kmart stores
No word on fate of local sites
Sarah Morgan / Argus Leader
Sears Holdings Corp., announced plans Tuesday to close up to 120 Sears and Kmart stores, but it’s unclear how the news will affect locations in Sioux Falls and throughout the state.
The closings come as a result of poor sales during the holiday season, which is the most crucial time of year for retailers. Sears Holdings Corp., said it has yet to determine which stores will close. Sears would not discuss how many, if any, jobs would be cut.
In Sioux Falls, there’s a Kmart at 3709 E. 10th St. and another one at 3020 W. 12th St. Sears is in The Empire Mall. Local managers said they could not comment on the announcement. Sears Holdings directed media to a news release on the company website.
The closings are the latest and most visible in a long series of moves to try to fix a retailer that has struggled with falling sales and shabby stores.
In an internal memo Tuesday to employees, CEO and President Lou D’Ambrosio said the retailer had not “generated the results we were seeking during the holiday.”
The company has more than 4,000 stores in the U.S. and Canada.
The company’s revenue at stores open at least a year fell 5.2 percent to date for the quarter at both Sears and Kmart, the company said Tuesday. That includes the critical holiday shopping period.
Phoenix-based retail analyst Jeff Green said the announcement is long overdue and he’s surprised more Kmart stores did not close during the economic downturn. Green said Kmart lacks any sort of identity or brand differentiation to get customers in the doors.
“They’re not necessarily known for price or selection or even convenience,” he said. “I don’t see Kmart as being a long-term viable brand.”
Green said Kmart was popular before Walmart, which now is known for price, and Target, which is now known for quality.
His prediction is that Kmart stores will close in small rural towns where Walmart dominates. Green said both Walmarts in Sioux Falls are better suited for regional traffic than Kmart.
“People cross-shop Kmart, they don’t go out to just Kmart … it’s part of a bigger shopping trip, and it’s not near the hub of retail in Sioux Falls,” he said. “When you aren’t able to establish a strong identity or brand presence, you become obsolete.”
Sears Holdings said the declining sales, ongoing pressure on profit margins and rising expenses pulled its adjusted earnings lower.
The company predicts fourth-quarter adjusted earnings will be less than half of the $933 million it reported for the same quarter last year.