After its stores were abandoned by many Christmas shoppers, Sears Holdings Corp. plans to close between 100 and 120 of its Sears and Kmart outlets in the United States.
Sears Holdings CEO and President Lou D'Ambrosio said "our performance and the difficult economic environment" has forced the company to reduce expenses and speed up plans to change its business model.
"These actions will better enable us to focus our investments on serving our customers and members through integrated retail -- at the store, online and in the home," he said in an internal memo to staff.
The company announced that no decision has been made on which of its 4,000-plus stores will close.
Analysts have long been critical of the retailer's falling sales and shabby stores, particularly in view of increased competition from Macy's, Target Corp. and especially Wal-Mart.
D'Ambrosio blamed disappointing holiday sales for the store closings. Revenue at stores open at least a year fell 5.2 per cent to date for the quarter at both Sears and Kmart, the company said Tuesday.
The CEO said the company will now concentrate on profitable stores while abandoning those with marginal performances.
"These actions will better enable us to focus our investments on serving our customers," he added.
Analysts say the outlook for Sears is bleak in a competitive market where the company is losing ground to its rivals.
"The extent of the weakness may be larger than expected but the reasons behind it are not," said Credit Suisse analyst Gary Balter. "It begins and some would argue ends with Sears' reluctance to invest in stores and service."
"There's no reason to go to Sears," said New York-based independent retail analyst Brian Sozzi, "It offers a depressing shopping experience and uncompetitive prices."
Early in the Christmas shopping season, the company fell behind its rivals by waiting until 4 a.m. on so-called Black Friday to open its Sears Roebuck outlets. Meanwhile, Best Buy, Wal-Mart and Toys R Us had opened the night before, even though it was the American Thanksgiving holiday.
The first sign of trouble may have come in mid-December when the parent company suddenly announced that its Sears Roebuck locations would be staying open until midnight until Dec. 23.
Kmart blamed its revenue drop on diminished layaways and lower than expected clothing and consumer electronics sales. Sears cited lacklustre consumer electronics and home appliance sales for its dropoff.
D'Ambrosio sloughed off criticism of Sears Holdings' performance, claiming the company is ready to forge ahead.
"We will bounce back and become stronger than ever," he said.
With files from The Associated Press
