The parent of Sears and Kmart is reportedly set to layoff 250 employees at its Hoffman Estates corporate headquarters and close more stores than previously expected, according to media reports.
Sears previously disclosed it would shutter 26 Sears and Kmart stores this October and November. Recently it said it would add dozens more to the list, according to a CNBC report.
Through an affiliate of his hedge fund ESL Investments, TransformCo, Eddie Lampert bought Sears and Kmart after their former parent, Sears Holdings, filed for bankruptcy. At the time, the company aimed to improve the retailer’s performance by running 425 of its profitable stores, rather than the roughly 700 stores it had when it filed for bankruptcy.
The company has also looked to build smaller stores under the Sears Home & Life banner focused on products like appliances and mattresses. A deal was also struck in June to purchase the rest of the Sears Hometown & Outlet business. The transaction is expected to close in the third quarter of this year.
In August, Transform revealed some of the store closings, stating, “Over the past several months, we have worked hard to strengthen our vendor relationships, return our inventory levels to normal, and improve customer satisfaction and operations; however, we have faced a number of challenges returning our stores to sustainable levels of productivity, including differences with Sears Holdings over our purchase agreement and a generally weak retail environment. These challenges have unfortunately affected our performance and limited our strategic choices.
“After careful review of where we are today, we believe the right course for the company is to accelerate the expansion of our smaller store formats which includes opening additional Home & Life stores and adding several hundred Sears Hometown stores after the Sears Hometown & Outlet transaction closes. We have made the difficult but necessary decision to close 26 large-format Sears and Kmart stores in late October through mid-November.”
The company added, “Following these steps, we will continue to evaluate our network of Sears and Kmart stores and cannot rule out additional store closures in the near term. Our goal remains to return the company to profitability and preserve as many jobs as possible in the communities we serve.”