Sears Holdings (SHLD) plans to close eight Sears stores and 13 Kmart stores in April and May, laying off hundreds of employees in the process.

Kimberly Freely, a spokeswoman for Sears Holdings, says the affected stores are located across the country and employ about 60 employees each. Many of the closings involve lease renewals, "but obviously performance is a factor," she says. "This is the normal course of business," Freely says. "We always evaluate our store portfolio."Both Sears and Kmart are getting squeezed by aggressive competition during a time when shoppers are reluctant to open their wallets. Sears is up against two strong midprice department store rivals, JC Penney (JCP) and Kohl's (KSS), while Kmart is fighting off Wal-Mart Stores (WMT) and Target (TGT). Among the planned closings are four Sears Essentials stores, which had been the company's attempt to expand into big-box retail.

Department stores across the board have suffered during the recession, but Sears has felt more pain than most. If comments on this site are any indication, shoppers just don't seem to like the store experience. Sears has been trying to improve that experience, adding toy departments and redesigning the beauty departments with new displays and exclusive merchandise. Nevertheless, Sears same-store sales (sales among stores that have been open at least a year) were down 4.8% during the all-important holiday shopping period. Kmart fared better, netting a 5.3% increase in same-store sales over the holidays.

Getting Creative With In-House Brands

Despite slowing sales, Sears and Kmart still have a number of brands that are popular with shoppers. Parent company Sears Holdings has been trying to find new ways to capitalize on those brands, making deals to carry them outside its own stores. Over the past month, it has announced deals to franchise its Sears Auto Centers, license the Diehard name for a line of battery accessories to be sold at stores nationwide, and sell Craftsman tools at Ace Hardware stores beginning in May.

In January, the company provided a glimmer of hope when it raised its profit forecast for the year due to the better-than-expected sales at Kmart. But for the full year, sales at Sears stores are still likely to be lower, while Kmart sales are expected to come in flat.

Sears Holdings will report its year-end results tomorrow, and management has forecast that it will show profits in the fourth quarter, after two straight quarters of losses. Management told investors earnings will come in between $3.36 and $4.06 per share for the fourth quarter and between $1.61 and $2.29 per share for the year. Analysts expect of $3.54 for the fourth quarter, up 20.4% from the year-ago period, according to Thomson Reuters.

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Dixie Patricia Cockr

The challenge for long-established retailers, like Sears, is trying to re-tool an already-exhausted approach to shopping, and a failure to utilize some seriously fresh ideas for modernizing and reinventing themselves to serve the 21st century consumers.

A really fresh approach would be for them to keep & improve the ideas that work well, but add some really exciting new ideas, like giving retail space and support for products by local artisans in every department, especially fashion & jewelry lines and try to set up some kind of arrangement with Fair Trade organizations across the globe. If I were them, I would certainly try a fresh & radical approach like this before I'd just fold up and go home. Use the advantages you already have to do something really different. That's about the only way to get people out of their houses and back in your stores!! I'd make a special trip to go to a store which carried goods by local artisans!!

December 27 2011 at 3:47 PM Report abuse rate up rate down Reply
Jim Hauser

I grew up on going to Sears. My mother did all her shopping there. When I became an adult, Sears was the first store that came to mind when I went shopping. Now I wouldn’t walk in the store if the merchandise was free. Here’s why.

The auto service store ripped me off, endangered my life and the life of my family by sending me home with a broken tire stud after I purchased a new set of tires, and then practically slapped me in the face for complaining about the outrageous treatment.. Sears had a motto that at one time really meant something: Satisfaction guaranteed. Now it’s owned by a hedge fund manager named Edward Lampert. In some people’s opinion, hedge fund managers contributed greatly towards wrecking our economy. In my opinion, Lampert is killing Sears. Mr. Roebuck and Mr. Sears must be turning over in their graves Thanks for taking away a fond childhood memory mr. lampert.

December 27 2011 at 3:15 PM Report abuse rate up rate down Reply