The cost-cutting strategy continues at Sears with another 63 stores targeted for closure early next year.
Emblematic of the struggle facing U.S. department stores, Sears Holdings has already closed more than 350 Sears and Kmart stores this year. An additional 45 Kmart stores and 18 Sears stores will be closing in late January 2018, the company said Thursday.
“Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size," the company said in a statement. "In the process, as previously announced 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 63 stores will remain open during the holiday season and employees at the closing stores will get severance pay and an opportunity to apply for other jobs within the retail chains. "Liquidation sales will begin as early as November 9 at these closing stores," the company said.
The retail industry s reeling as a growing number of shoppers do their buying online and e-commerce giant Amazon becomes the go-to for many consumers. But the decline of Sears has been particularly stark.
The iconic store chain, whose goods once filled American households from the garage to the living room, has struggled to remain relevant as shoppers increasingly bypass it to head to big box giants like Walmart, or specialty retailers like Best Buy and Home Depot instead.
In March, Sears said in a filing with the Securities and Exchange Commission that it had "substantial doubt" about its ability to stay in business unless it could borrow more and generate additional cash from its assets. However, the notification was required because of a rule change that mandated businesses be more transparent about potential risks they face within a year of their reported financial statements. Independent auditor Deloitte said at the time that it believed Sears Holdings was still viable.
The company has initiated a turnaround plan this year that aims to slash $1 billion in costs annually, and cut the company's debt by $1.5 billion. Shedding low-performing stores has been key to the restructuring, but Sears also sold Craftsman, one of its most valuable brands, to Stanley Black & Decker for roughly $900 million.
In another move that could boost the company's balance sheet, Sears announced in July an agreement to sell its Kenmore appliance brand on Amazon. And the company has been increasing the perks available to its most frequent shoppers.
Just this week, Sears and Kmart launched a nearly month-long sale for members of its "Shop Your Way'' loyalty program to woo customers during the all-important holiday period. Sears shoppers will get discounts ranging from 10% to 50%, and Kmart shoppers will see sales of 10% to 40% on all items through Nov. 25.
Some of the changes, while not increasing profits, do appear to be stemming the financial bleeding. While the company reported a net loss of $251 million for its second quarter that ended July 29, that was down from a loss of $395 million during the same period last year, and also beat S&P analysts projection of $266 million.
Still, there are continuing signs that Sears is no longer the dominant player it once was. Last month, it announced that for the first time in more than 100 years, it would no longer sell Whirlpool appliances because the two companies could not reach an agreement on price.