Two days after Christmas and lackluster holiday sales are being blamed for the decision by Sears Holding Group, the corporate owners of Sears and Kmart stores, to close 100-120 stores in the coming year.
Chief Executive Officer Lou D’Ambrosio said in a press release by the company:
“Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model.”
In-store sales in the eight weeks that ended on Christmas day were down a combined 5.2 percent – 4.4. percent in Kmart stores and 6 percent in Sears stores.
The list of closing stores has not been determined yet, and I’ll be watching closely to see if our local stores are on the list, though, luckily, CNN is reporting that most of the stores in the Northeast and Midwest should be safe since these areas are considered the strongholds of the Hoffman Estates, Ill.-based company.
Also, if they’re closing underperforming stores, I don’t think the York Kmart should qualify.
I went there about a week ago for what I thought would be a “quick in-and-out” trip. Let’s just say, it felt like everyone within a five-mile radius decided to go to Kmart. It was PACKED.
Anyway, some other interesting things CNN noted from their conversation with Burt Flickinger III, managing director of Strategic Resource Group, about the closures:
– He blamed online sales tax or part of the brick-and-mortar chain’s problems:
“There’s been a significant shift online because of the sales tax savings,” he said. “Consumers see it as instant discount and most online retailers are delivering for free. That puts Sears and other land-based retailers at a significant disadvantage for the foreseeable future.”
– He also said malls could be in big trouble without some big changes:
“Shopping malls across America have record vacancy rates of 11 percent,” he said. “Shopping mall owners have not done a good job keeping malls up to date and getting the tenants needed to support anchor tenants.”
Again, nothing has been decided in regards to which stores will close.
But let’s hope York County won’t be losing any stores.