It isn't good news for Sears. It has been reported by USA Today that the retail company will accelerate the closure of their stores and continue to purge their assets in order to keep the business afloat. While the company was already planning on closing some stores, it is expected to go into double time in the coming months. This comes after reports that the company's holiday sales fell well below expectations.
Sears expects that their sales will come to $7.3 billion for the end of quarter January 30, compared with last year's $8.0 billion Q4 sales and the analyst's estimate of $7.4 billion. Sears has until February 25 to report fourth quarter and full year sales reports.
Sears estimated these sales at stores that were open for at least a year, a key measure for any retailer, fell 7.1% in both Sears and Kmart stores. The apparel business took a hit from the warm weather and competition, and it is what is likely bringing the company down.
As a result of these falling sales, Sears will speed up the 50 planned closures of the stores that aren't pulling a profit in this year. They will also look at ways to cut costs between $550 million and $650 million, including evaluating their staffing levels. The company has not yet said which of their stores they will be closing.
Sears will sell another $300 million in assets within the first 6 months of this year. They are also considering selling off the Sears Auto Center business. This is in addition to the significant sales of their real estate portfolio so that they can keep cash.
The problem stems from the fact that online sales are still booming and that customers no longer feel the need to go into Sears. Instead, they are going into places like Target and H&M which are moving at a faster rate. Even their appliance sales are down thanks to Lowe's and Home Depot.
Don't Miss: Nintendo Switch: Everything You Need To Know
They have been trying to correct the problem with a move toward a "member-centric" loyalty program, but that hasn't proven to be successful yet. They also hope to move forward into better pricing, displays, and modelling.