The start of the new year is more a continuation of the demise of Sears Holdings Corp., as the company announced to its employees Thursday the closure of an additional 103 Sears and Kmart stores.
The list consists of 64 Kmart stores and 39 Sears stores — including the Sears at 7300 Bustleton Ave. in Northeast Philly and one at the Ocean County Mall in Toms River, N.J. Also on the chopping block is a Kmart on 3301 Aramingo Ave., in Port Richmond.
The closures — which come on top of the 350 Sears and Kmarts closed last year — are expected between early March and April of this year with liquidation sales to start as early as next Friday, Jan. 12, at some locations. The entire department store sector is suffering as internet sales intensify.
“Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base,” the company said in a statement. “In the process … we will continue to close some unprofitable stores.”
The company said full-time employees will receive severance and be able to apply for open positions at area Kmart and Sears stores.
A total of 10 Kmart stores in Pennsylvania are targeted for closure in early April, including Bridgeville, Sayre, Harrisburg, and Pittston; and three Sears stores — including Pittsburgh and Hanover.
The Sears at the Ocean County Mall is the only one in New Jersey that is closing in this round.
The news comes a little more than six months after the company announced in early June that it was closing 66 stores nationwide, including a Sears in Vineland, and Kmarts in Mantua, Gloucester County, and Manahawkin, Ocean County. No Sears stores in Pennsylvania were affected then.
“Sears is on life support with very limited turnaround prospects on the horizon,” Ken Perkins, president of Retail Metrics Inc., which tracks the retail industry for investors, said at the time.
Perkins said the once-iconic department store has had just one quarter of positive same-store sales growth in the last 12 years. Sears has not turned an operating profit in five years and has managed just eight profitable quarters in the last 39 — including last quarter. The stock closed Friday at $3.48, down 2.79 percent.
Sears’ store count has plummeted from a high of 4,010 at the end of 2011 to just 1,275 at the end of April 2017. The additional 100 closings will bring it down to just over 1,100 stores.
In July 2015, Sears Holdings created New York-based Seritage Growth Properties, an independent real estate investment trust (REIT), to better manage its remaining assets and to take on the role of a landlord.
Seritage’s growth strategy is based on taking space away from Sears. The trust bailed out Sears Holdings by buying 266 Sears and Kmart stores for $2.7 billion. Seritage gets 78 percent of its rent from Sears Holdings, which occupies all but 11 of the stores.
Seritage aims to capture higher rates by slicing up Sears anchor stores into smaller spaces and re-leasing them — such as the former Sears at the King of Prussia Mall, which is now occupied by a Primark and a Dick’s Sporting Goods.
In a recent SEC filing, Seritage said that the department-store chain had exercised its right to terminate the leases on 19 unprofitable stores. This marked the second time Sears chose to close stores it sold off to Seritage in 2015.
Sears chief financial officer Rob Riecker said in a recent conference call with analysts that the retailer would be focusing on improving the customer experience in its remaining stores.
But analysts have been saying it’s likely too late.
This is the latest round of closures for the company that has struggled against online shopping’s surge and that retail analysts say is part of the overall deterioration of the traditional department store. Macy’s and J.C. Penney have also been shuttering hundreds of stores.
Even though J.C. Penney reported that same-store sales climbed more than 3 percent during November and December compared with last year, and Macy’s reported strong holiday sales, a turnaround is unlikely for either, according to analysts.
Macy’s announced in August it was closing 100 stores, with the remaining 11 stores closing in the first quarter of this year.
Sue Gill, 58, of Beachwood, N.J., about a mile from Toms River, said she will miss the Sears there, where she shops at least once a month.
“I was always taught by my family to have a Sears [credit] card for mainstays of the home, like sheets and linens, and if I ever needed an appliance,” said the nursing professor at Ocean County College. “Sears stood for reliability and dependability.
“It’s definitely the online shopping,” she said. “People are changing their style of shopping.”