Sears, Kmart Said Planning to Close 72 More Stores

Beleaguered iconic retailer Sears reportedly is planning to close 72 additional stores this year, in addition to 180 locations the company had previously announced it would shutter.

Business Insider reported that the company plans to shut 72 stores – most of them by September – including 49 Kmart stores, 16 Sears stores and seven auto centers. USA Today put the total at 66 and didn’t mention auto centers.

The financial woes of the Illinois-based company, whose name has been a trusted retailing icon for generations of Americans, have deepened dramatically in recent months.

Sears Holdings Corp., once the largest U.S. retailer, in March warned about its ability to continue as a going concern after years of losses and declining sales, Reuters reported.

However, the parent company of Sears and Kmart last month reported its first quarterly profit in nearly two years, as the retailer benefited from the sale of its Craftsman brand and a program to cut $1.25 billion in costs, amid doubts about its ability to continue as a going concern, Reuters reported.

Sears CEO Eddie Lampert said those results had "clearly demonstrated" the company's commitment to return to solid financial footing.

However, sales continued a years-long decline, hurt by lower demand for groceries, apparel and home appliances at the retailer's Sears and Kmart stores.

Sears has been struggling to adjust to the changing retail landscape and rising competition from Wal-Mart Stores Inc., Target Corp. and Amazon.com Inc.

Sales at Sears' U.S. stores open more than a year fell 12.4 percent, while at Kmart it declined 11.2 percent in the first quarter ended April 29.

The company said in April it expected a net profit of between $185 million and $285 million for the first quarter, through a cost-cutting plan, which included store closures and cutting management jobs.

Selling and general expenses decreased about 16 percent to $1.27 billion in the quarter, leading to a near-third drop in total costs to $4 billion.

Sears said it cut up to $700 million in costs to date since announcing the plan in February.

The company in March sold its Craftsman tools brand to Stanley Black & Decker Inc. for an upfront payment of $525 million.

Sears, which has been closing stores and divesting businesses for years to cope with falling sales and a growing debt pile, warned in March about its ability to continue as a going concern.

Sears stock did surge more than 30 percent in the wake of the earnings,

However, at least two people, including a hedge fund manager, said the stock's surge was more indicative of a "short squeeze" than a turnaround in the business. (A short squeeze is commonly defined as a rapid increase in the price of a stock that occurs when there is a lack of supply and an excess of demand for the stock.)

Sears stock late Tuesday at $6.61, down 17 cents, or 2.51 percent.

"The stock movement does not indicate anything related to investment on the basis of fundamentals," David Tawil, president of hedge fund Maglan Capital, which invests in distressed companies, told Reuters. The fund said it does not have a stake in Sears.

Mark Cohen, former CEO of Sears Canada, backed the view.

"There's no turnaround. Anybody who suggests that that's the case... is suffering from a loss of reality," said Cohen, currently director of retail studies at Columbia Business School.

As reported by Business Insider, here is a list of the planned closures:

Sears