Some stores have managed to improve their financial situation during the holiday shopping season, but others didn’t do so well. According to a report published in the Associated Press, Sears and Kmart will close more than 100 stores because of the financial problems they are currently facing.
The parent company of Sears and Kmart has gone through a series of declining sales and deteriorating stores lately. The holidays shopping sales was supposed to ameliorate the disastrous situation, but as it turns out, these offers were not enough. In the end, more than 100 Sears and Kmart stores will be closed in order to save the budget.
The reps of the company told the press that they will first close the stores located outside the city because they want to concentrate all their attention on the locations that produce more money. This measure was proposed by Eddie Lampert, the hands-on chairman who has been struggling to regain the company’s fortune for a while. After his decision was publicly announced, Sears dropped 27 percentages.
Although Sears is one of the trademark companies of America, its reputation was severely damaged during the past few years. The company started with a mail-order catalog in the 1880s and gradually turned into one of the most famous brands of the country. Its rivals, Walmart and Target Corp gained territory in recent years, so Sears was perceived as a company with dowdy merchandise. Consequently, the sales diminished and the company lost its leading position on the stock market.
Analysts, on the other hand, think the recent measure is not enough to solve the company’s problems. In their opinion, there is nothing that executives can do in order to regain Sears’ leading position. Analyst Brian Sozzi stated that customers don’t visit these shops because they have nothing to buy there. They offer a small range of products and the prices are most of the times bigger than the ones offered by competitive stores.
Sears’ spokesperson, Chris Brathwaite said the company has enough money to survive the current crisis. He further stated that the firm has $2.9 billion available under its credit lines. The spokesperson did not say what stores would close or how many jobs might be cut.