Kmart Closing More Stores In the United States

Kmart, the retail chain, continues to struggle with sales falling and has announced it will be closing another 64 stores in the U.S. according to someone close to the situation.

Liquidation sales are to start September 22 and the schedule is for the stores to close for good during the middle of December, according to one person close to the situation, but requested anonymity because they are not allowed to speak publicly about the matter.

It is the most recent round of closings by the chain. Sears Holding, the Kmart parent company, said this past April that it was closing 68 Kmart locations during the summer, which it did.

Both Kmart and Sears have experienced difficulty trying to stay profitable and competitive in today’s retail environment that is dominated increasingly by other chains that are mass market and by e-commerce giants such as Amazon.

The latest round of closures includes 17 locations that were amongst 235 that were sold in 2015 by Sears to Seritage. That deal included a provision that gave Sears Holdings the right to lease the locations back from Seritage. However, it has the option to vacate the location if the store loses money.

Sears and Kmart are not the only traditional retailers that are in brick and mortar locations that have been struggling. Last month, Macy’s said it would be closing 100 of its full line stores that currently number 675 due to dwindling profits.

During the summer, Sports Authority announced it filed Chapter 11 bankruptcy and later closed all 460 of its stores. Walmart during January said it would close 269 stores around the world.

Sears has shed real estate to find much needed cash, but dropping sales have continued to take their toll.

During the second quarter, which ended on July 30, the business posted a $395 million loss, in comparison to a profit of $208 million during the same quarter one year ago.

Meanwhile, Kmart and Sears sales at stores opened a minimum of one year dropped by 5.1% during the same period.

Nonetheless, that represented an improvement compared to the drop that took place during the previous quarter. Total revenue was down to just over $5.7 billion compared to $6.2 billion for the second quarter of last year.

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David Glass

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