Sears is planning to close 150 additional stores in an attempt to “enhance liquidity and stabilize operating performance,” the company announced Thursday.
The company also confirmed that it has struck a deal to sell its Craftsman brand of tools to Stanley Black & Decker for $900 million.
Sears has been working to stop steadily declining profits and ongoing financial losses. Closing stores and attempting to sell its brands have been part of those efforts.
“These actions will facilitate the transformation of Sears from a store-based, asset-intensive business model into a membership-focused, asset-light business model,” according to the company.
The stores slated for closure include 108 unprofitable Kmart and 42 unprofitable Sears locations. Those stores generated $1.2 billion in sales in 2016, but their earnings before interest, taxes, depreciation and amortization amounted to a $60 million loss, the company reports.
“The decision to close stores is a difficult but necessary step as we take actions to strengthen the company’s operations and fund its transformation,” chairman and CEO Edward S. Lampert says.
“Many of these stores have struggled with their financial performance for years, and we have kept them open to maintain local jobs and in the hope that they would turn around. But in order to meet our objective of returning to profitability, we have to make tough decisions and will continue to do so, which will give our better performing stores a chance at success.”
Near the end of 2016, the company announced 30 store closures that will occur within the first quarter of 2017. The additional 150 stores will close within the same time frame.
In addition, Lampert’s investment firm ESL Investments Inc. is lending to the company, offering a $200 million letter of credit, Bloomberg reports.
The letter of credit could be expanded up to $500 million, according to Sears. The company has also obtained an additional $500 million loan secured by various real estate properties.