Sears Holdings is restructuring to reduce its costs by $1 billion in 2017, the company announced Feb. 10.
The retailer has seen steadily declining sales at its Kmart and Sears stores, and has been looking for ways to get profitable again. Earlier this year, the company confirmed plans to close 150 store locations and sell its iconic Craftsman tool brand to decrease expenses and free up capital.
Restructuring will include the following, according to the company:
- Reducing operational costs by simplifying the company’s organizational structure, including consolidation of Sears and Kmart functions.
- Implementing new processes to improve pricing, sourcing, supply chain and inventory management.
- Enhancing the product selection at Sears and Kmart stores to focus more on profitable categories.
- Considering additional savings by managing its “real estate portfolio to identify additional opportunities for reconfiguration and reduction of capital obligations.”
“We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability,” Edward S. Lampert, chairman and CEO, says.
The company reported a decline in sales during the fourth quarter of 2016, with total revenues expected to be $6.1 billion for the quarter. Comparable store sales for the fourth quarter declined by 10.3 percent.