Sears Holdings said Thursday it will be closing 72 more stores in 2018 as its sales continue to erode, dropping more than 30 percent year-over-year in the first quarter.

The retailer said it has identified 100 non-profitable stores, and will begin closing sales at 72 of these stores in the near future.

“We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted,” the company said in a press release announcing its first-quarter results.

Sears plans to provide a list of these stores later Thursday.

Sears has been caught in a vicious cycle, it has been shuttering weak stores to reduce its costs, but as it closes more stores, sales fall further. In the latest period, it said roughly two-thirds of its sales decline was tied to store closures.

By the end of 2017, a combined Sears and Kmart operated roughly 1,000 locations. Most recently in January, the embattled department store chain announced the shuttering of 64 Kmart stores and 39 Sears stores, adding to the hundreds of closures that have taken place over the past few years. Some locations are currently being auctioned off online.

CEO Eddie Lampert told CNBC in a recent interview: “We’re not liquidating just to liquidate. We’re liquidating … to get capital to put into our pension plan. As opposed to erring on the side of, ‘This store might work.’ … If it’s not working, we’ve invested the time, so we’ve got to close it because we are now jeopardizing this [store] over here.”

But the losses are mounting. In the first quarter, Sears reported a loss of $424 million, or $3.93 per share.

Same-store sales, a key metric used to monitor a retailer’s health, were down 11.9 percent overall. This consisted of a 9.5 percent drop at Kmart stores and a 13.4 percent decline at Sears stores.

Sears’ dire financial state has many industry experts thinking the company is on the brink of filing for bankruptcy.

The retailer burned through $1.8 billion in cash in its operations during 2017, $1.4 billion during 2016 and $2.2 billion during 2015, company filings show. It ended last year with $336 million in its cash reserves, compared with $286 million the previous year, a slight uptick thanks to asset sales.

Sears had roughly $4.3 billion in funded debt as of Feb. 3, 2018, along with unfunded pension and retirement obligations of about $1.6 billion.

In addition to shedding its real estate, Sears currently has an independent committee evaluating a deal where the company would sell some of its other assets, including the Kenmore brand, to Lampert’s hedge fund, ESL Investments. Earlier this week, ESL said it received “numerous inquiries from potential partners” that are interested in getting involved in such a transaction.

Lampert noted, as it relates to any future transactions, “speed and certainty … are critical.” Heading into the second half of the year, Sears must now gear up for the 2018 holiday season.

Source: Tech CNBC
Sears plans to close 72 more stores, closing sales to start in near future