By KRWG News
Las Cruces – Sears Holdings released a list of 79 Sears and Kmart closings at www.searsmedia.com and New Mexico and Texas stores were NOT on the list. However, the company said it expects to close up to 120 stores, and more closings would be announced at an undetermined date.
From Sears Holdings:
Comparable store sales for the eight-week ("QTD") and year-to-date ("YTD") periods ended December 25, 2011 for its Kmart and Sears stores are as follows:
Kmart
-4.4%
-1.8%
Sears Domestic
-6.0%
-3.3%
Kmart's quarter-to-date comparable store sales decline reflects decreases in the consumer electronics and apparel categories and lower layaway sales. Sears Domestic's quarter-to-date sales decline was primarily driven by the consumer electronics and home appliance categories, with more than half of the decline in Sears Domestic occurring in consumer electronics. Sears apparel sales were flat and Lands' End in Sears stores was up mid-single digits.
The combination of lower sales and continued margin pressure coupled with expense increases has led to a decline in our Adjusted EBITDA. Accordingly, we expect that our fourth quarter consolidated Adjusted EBITDA will be less than half of last year's amount. For reference, last year we generated $933 million of Adjusted EBITDA in the fourth quarter ($795 million domestically and $138 million in Canada).
Due to our performance in 2011 we expect that we will record in the fourth quarter a non-cash charge related to a valuation allowance on certain deferred tax assets of $1.6 to $1.8 billion. Although a valuation adjustment is recognized on these deferred tax assets, no economic loss has occurred as the underlying net operating loss carryforwards and other tax benefits remain available to reduce future taxes to the extent income is generated. Further, we may recognize in the fourth quarter an impairment charge on some goodwill balances for as much as $0.6 billion. These charges would be non-cash and combined are estimated to be between $1.6 and $2.4 billion.
"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model. These actions will better enable us to focus our investments on serving our customers and members through integrated retail - at the store, online and in the home," said Chief Executive Officer Lou D'Ambrosio. Specific actions which we plan to take include:
Close 100 to 120 Kmart and Sears Full-line stores. We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate. Further, we intend to optimize the space allocation based on category performance in certain stores. Final determination of the stores to be closed has not yet been made. The list of stores closing will be posted at www.searsmedia.com when final determination is made.
Excluding the effect of store closures, we currently expect to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year.
Focus on improving gross profit dollars through better inventory management and more targeted pricing and promotion.
Reduce our fixed costs by $100 to $200 million.
In addition to the specific store closures listed above, we will carefully evaluate store performance going forward and act opportunistically to recognize value from poor performing stores as circumstances allow. While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment. We intend to accentuate our focus and resources to our better performing stores with the goal of converting their customer experience into a world-class integrated retail experience.
We currently expect the store closure and inventory reduction actions to reduce peak inventory in 2012 by $500 to $580 million and reduce our peak borrowing need by $300 to $350 million in 2012 from levels that may have resulted in 2012 without such actions.
At December 23rd, we had $483 million of borrowings outstanding on our domestic revolving credit facility leaving us with over $2.9 billion of availability on our revolving credit facilities ($2.1 billion on our domestic facility and $0.8 billion on our Canadian facility). There were no borrowings outstanding last year at this time.
During the fourth quarter through December 23, 2011, we have not repurchased any of our common shares under our share repurchase program. As of December 23, 2011, we had remaining authorization to repurchase $524 million of common shares under the previously approved programs.
Fourth Quarter Earnings Release
The company currently plans to release financial results for its fiscal 2011 fourth quarter and full year on or about February 23, 2012, before the market opens.
Forward-Looking Statements
Results are preliminary and unaudited. This press release contains forward-looking statements about our expectations for the fourth quarter of fiscal 2011. Forward-looking statements contained in this press release also include statements about the expected range of the valuation allowance on certain deferred tax assets, the possible recognition of an impairment on some goodwill balances, various initiatives to reduce expenses, adjust our asset base, generate cash and transform our business model and the impact of such initiatives. Forward-looking statements are subject to risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: our ability to offer merchandise and services that our customers want, including our proprietary brand products; our ability to successfully implement various initiatives, including reducing expenses, successfully closing stores, including liquidating related inventory at expected mark-down levels and selling or subleasing such stores on acceptable terms, improving inventory management and other capabilities; customer acceptance of our integrated retail model; impairment charges for goodwill and intangible assets or fixed-asset impairment for long-lived assets and the results of the second step of the goodwill impairment test process described in the "Summary of Significant Accounting Policies" in Note 1 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for fiscal year 2010; competitive conditions in the retail and related services industries; worldwide economic conditions and business uncertainty, the availability of consumer and commercial credit, changes in consumer confidence, tastes, preferences and spending, and changes in vendor relationships; the impact of seasonal buying patterns, including seasonal fluctuations due to weather conditions, which are difficult to forecast with certainty; our dependence on sources outside the United States for significant amounts of our merchandise; our extensive reliance on computer systems to process transactions, summarize results and manage our business; our reliance on third parties to provide us with services in connection with the administration of certain aspects of our business; our ability to attract, motivate and retain key executives and other associates; the outcome of pending and/or future legal proceedings, including product liability claims and proceedings with respect to which the parties have reached a preliminary settlement; and the timing and amount of required pension plan funding. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available.
Store closings:
FORMAT STREET ADDRESS CITY STATE ZIP CLOSE DATE
Sears Hardlines Only 1916 19th Ave Lewiston ID 83501 TBD Sears Hardlines Only Us Hwy 25e - Ste B2 Middlesboro KY 40965 TBD Grand/Essentials 5451 Halls Mill Rd Ste 14 Mobile - Halls Mill AL 36619 TBD Grand/Essentials 101 E Interntn'l Speedway Deland FL 32724 TBD Grand/Essentials 12080 Carmel Mountain Rd San Diego - Carmel CA 92128 TBD Grand/Essentials 3020 Se Federal Hwy Stuart FL 34997 TBD Grand/Essentials 4560 Forest Hill Blvd W Palm Beach FL 33406 TBD Grand/Essentials 3610 Peck Rd El Monte CA 91732 TBD Grand/Essentials 7655 Clairemont Mesa Blvd San Diego - Clarmnt CA 92111 TBD Grand/Essentials 375 Amherst St Bldg 1 Nashua NH 03063 TBD Grand/Essentials 480 West Street Keene NH 03431 TBD Grand/Essentials 1363 Nw St Lucie W Blvd Port St Lucie FL 34986 TBD Grand/Essentials 9200 Baltimore Nat Pike Ellicott City MD 21042 TBD Grand/Essentials 8375 E Grand River Brighton MI 48116 TBD Grand/Essentials 601 North M-291 Lee's Summit MO 64063 TBD Grand/Essentials 625 Highway 136 West Baraboo WI 53913 TBD Sears Full-Line 1400 Metrocenter Jackson MS 39209 TBD Sears Full-Line 150 S 69th St Upper Darby PA 19082 TBD Sears Full-Line 18000 Vernier Ave Harper Woods MI 48225 TBD Sears Full-Line 15 Crestwood Plz St Louis-Crstwd MO 63126 TBD Sears Full-Line 5244 Hickory Hollow Pkwy Antioch TN 37013 TBD Sears Full-Line 3661 Eisenhower Pkwy Macon GA 31206 TBD Sears Full-Line 880 N Military Hwy Ste 1086 Norfolk VA 44221 TBD Sears Full-Line 921 Eastchester Dr Ste 1002 High Point NC 27262 TBD Sears Full-Line 2121 N Monroe St Space 300 Monroe MI 38671 TBD Sears Full-Line 1722 Veterans Blvd Mccomb MS 39648 TBD Sears Full-Line 1404 Old Aberdeen Rd Columbus MS 39705 TBD Sears Full-Line 2109 S Scatterfield Rd Anderson IN 46016 TBD Sears Full-Line 1357 S Main St Adrian MI 49221 TBD Sears Full-Line 5167 Hwy 70 Cypress Bay Plaza; Suite 90 Morehead City NC 28557 TBD Sears Full-Line 2727 Iowa St Lawrence KS 66046 TBD Sears Full-Line 1400 Nw Garden Valley Blvd #1 Roseburg OR 97470 TBD Sears Full-Line 200 Paul Huff Pkwy Nw Cleveland TN 37312 TBD Sears Full-Line 1057 Broad St Sumter SC 29150 TBD Sears Full-Line 363 S Illinois Ave Oak Ridge TN 37830 TBD Sears Full-Line 1250 S Hover Rd Longmont CO 80501 TBD Sears Full-Line 351 W Schuylkill Rd Pottstown PA 19465 TBD Sears Full-Line 1801 Nw Us Highway 19 Crystal River FL 34428 TBD Sears Full-Line 1631 W Rose St Ste 2 Walla Walla WA 99362 TBD Sears Full-Line 1100 N Wesleyan Blvd Rocky Mount NC 27804 TBD Sears Full-Line 1689 E Broad St Statesville NC 28677 TBD Kmart 17625 Chillicothe Rd Chagrin Falls OH 44023 TBD Kmart 951 By-Pass Rd Winchester KY 40391 TBD Kmart 2601 S Main St Rice Lake WI 54868 TBD Kmart 2960 Derr Road Springfield - N'land OH 45503 TBD Kmart 51027 Highway #6 Glenwood Springs CO 81601 TBD Kmart 1605 Buford Highway Buford GA 30518 TBD Kmart 101 Town & Country Lane Hazard KY 41701 TBD Kmart 1525 Sadler Road Fernandina Beach FL 32034 TBD Kmart 225 S Tyndall Pkwy Callaway FL 32404 TBD Kmart 66011 Van Dyke Washington Twp. MI 48095 TBD Kmart 9550 Wicker St. John IN 46373 TBD Kmart 1724 State Road 44 New Smyrna Beach FL 32069 TBD Kmart 1605 S First Street Willmar MN 56201 TBD Kmart 50700 Gratiot Ave North Chesterfield Twp. MI 48051 TBD Kmart 9552 Highway 5 Douglasville GA 30135 TBD Kmart 237 East Main Hendersonville TN 37075 TBD Kmart 5005 W 120th Broomfield CO 80020 TBD Kmart 1777 U S 1 South St. Augustine FL 32086 TBD Kmart 2047 E University Drive Auburn AL 36830 TBD Kmart 75 E Broad St Gadsden AL 35903 TBD Kmart 2727 16th Ave S W Cedar Rapids-16th Av IA 52404 TBD Kmart 2244 S Reynolds Rd Toledo - Reynolds Rd OH 43614 TBD Kmart 627-701 E Manhattan Blvd Toledo - Manhatn Blv OH 43608 TBD Kmart 7201 Pendleton Pike Indy - Pendlton Plza IN 46226 TBD Kmart 230 Cleveland Ave S W Atlanta GA 30315 TBD Kmart 1105 North Court Street Medina OH 44256 TBD Kmart 810 Saxon Blvd Orange City FL 32763 TBD Kmart 5600 Milgen Rd - Bldg 106 Columbs-Manch Sq GA 31907 TBD Kmart 7965 Tara Boulevard Jonesboro GA 30236 TBD Kmart 11003 Hull St Rd Midlothian VA 23113 TBD Kmart 3616 W Kimberly Rd Davenprt-Kimbrly Rd IA 52806 TBD Kmart 2421 N Federal Hwy Pompano Beach FL 33064 TBD Kmart 4141 Martin Way Lacey WA 98516 TBD Kmart 3100 Hamilton Rd Columbus - Hamltn Rd OH 43227 TBD Kmart 1734 Mall Dr Duluth - Mall Dr MN 55811 TBD Kmart 4300 Xylon N New Hope MN 55428 TBD Kmart 3201 White Bear Ave White Bear Lake MN 55110 TBD Kmart 6807 Midlothian Turnpike Richmond - Midloth VA 23225 TBD