JACKSON – (AP) Sears Holdings Corp. says it will close three stores in Mississippi among the dozens of retail outlets the company says it will close as a result of poor holiday sales.
Sears will close stores in McComb, Columbus and at the Metrocenter Mall in west Jackson.
The company says employment varies by stores and format, and it could not provide the total number of affected employees.
Sears Holdings said it could no longer prop up “marginally performing” locations and would refocus its efforts on stores that make money.
As a result, they plan to close between 100 and 120 Sears and Kmart stores nationwide in an effort to raise cash after a weak holiday shopping season for the retailer.
The closings fueled speculation about whether the 125-year-old retailer can turn itself around.
The closings are the latest and most visible in a long series of moves to try to fix a company that has struggled with falling sales and shabby stores as rivals like Wal-Mart Stores Inc. and Target Corp. spruced up their looks and turned into one-stop shopping sources.
“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.”
Billionaire investor Edward Lampert purchased Kmart out of bankruptcy in 2003 and bought Sears, Roebuck & Co. a year later. Since 2004 Sears Holdings — which operates both Kmart and Sears stores — has watched its cash and short-term investments go from about $2.09 billion for the year ended Jan. 31, 2004 to $1.34 billion for the year ended Jan. 31, 2011, according to FactSet. The figure now stands at about $700 million.
Credit Suisse analyst Gary Balter says the softer-than-expected holiday sales performance point to “deepening problems at this struggling chain and renewed worries about Sears survivability.”
Balter added that Sears’ weakening performance may lead its vendors to start to worry about their exposure. If vendors stop shipping to a retailer or start insisting on cash up front, it can spell the end.
Some industry experts say part of the problem Sears is facing is that economic difficulties continue to grip its core customers. These middle-income shoppers have seen their wages fail to keep up with higher costs for household basics like food.
But the bigger issue, analysts say, is that Sears hasn’t invested in remodeling, leaving its stores uninviting.
Preschool teacher Sara Kriz concurred.
Picking up conditioner at a Kmart in Manhattan on Tuesday, Kriz said she shops at Kmart “only when I have to,” which amounts to once every few months. Yet she goes to Wal-Mart or Target nearly every week because, she said, they are cleaner and better stocked.
“It seems easier to go to Target and Wal-Mart to get the same thing at the same price,” she said.
Sears Holdings appeared to stumble early in the holiday season, as it opened its Sears, Roebuck and Co. stores at 4 a.m. on Black Friday, the day after Thanksgiving. Rivals including Best Buy Co., Wal-Mart and Toys R Us opened as early as Thanksgiving night. Sears stores had opened on Thanksgiving Day in 2010. Kmart has been opening on Thanksgiving for years.
A hint that trouble might be brewing came in mid-December when Sears Holdings unexpectedly announced that 260 of its Sears, Roebuck and Co. locations would stay open until midnight through Dec. 23.
In an internal memo last Tuesday to employees, CEO and President Lou D’Ambrosio said that the retailer had not “generated the results we were seeking during the holiday.”
The company said that the store closings will generate $140 to $170 million in cash from inventory sales. It expects the sale or sublease of real estate holdings to add more cash.
The Hoffman Estates, Ill., company has more than 4,000 stores in the U.S. and Canada.
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