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Sears Holding Corp. to close up to 120 stores

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Hoffman Estates, Ill.-based Sears Holding Corp. (Nasdaq: SHLD) has announced it will close up to 120 Kmart and Sears retail stores following a less than desirable holiday sales season.

Comparable store sales for the eight-week period ending Dec. 25 showed a 4.4 percent decrease for Kmart stores and a 6 percent decrease for Sears stores, for an average of 5.2 percent. The company is predicting its fourth-quarter earnings before interest, taxes, depreciation and amortization to be less than half of last year's $933 million in the quarter, according to a news release.

Sears Holding Corp. has not determined the stores that will close and hadn't released a list of stores being considered as of 11 a.m. A list of the 100 to 120 stores will be posted on the corporate Web site when the final determination is made.

Following the closures, the company expects to generate $140 to $170 million as the net inventory of the stores is sold. Additional cash is expected from the sale or sublease of the related real estate.

"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce ongoing expenses, adjust our asset base and accelerate the transformation of our 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," Sears CEO Lou D'Ambrosio said in the release.

Other actions to be taken include:
  • reducing 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter;
  • focusing on better inventory management and targeting pricing and promotion; and
  • reducing fixed costs by $100 million to $200 million.
Sears Holding Corp., which operates more than 4,000 retail stores in the U.S. and Canada including Sears and Kmart, plans to release its fourth-quarter and year-end financial results on Feb. 23, according to the release.

As of 10:58 a.m., the company's shares were trading at $34.98, compared to its 52-week range of $34.80 to $94.79.[[In-content Ad]]

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