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Kmart And Sears Closing Stores: Current Employees Will Have To Reapply

By Antonio J. Newell
Published on: 05:38 PST, Apr 22, 2016

Sears Holdings Corporation is making serious cutback decisions for the summer of 2016. As part of the business restructure, Kmart is closing several of its stores as well. The company refers to these locations as unprofitable.

As the cliché states, you’re only as strong as your weakest link. Well, that seems to be the temporary philosophy behind Sears Holdings’ recent decisions regarding store closings. According to CBS News Detroit, the company is planning to close 68 Kmart and 10 Sears stores. The news source noted that three of the locations are in its very own Michigan state.

For employees and shoppers who will be affected by the store closings in Michigan, the source mentions the following locations.

  • Super K on Van Born Road in Taylor (mid-September)
  • Kmart on Houghton Lake Drive in Houghton Lake (July)
  • Sears on Eastman Avenue in Midland (July).

According to the source, Sears Holdings feels that these stores, along with all others it is closing, have been unprofitable for the company.

Sears and Kmart’s sales have been struggling against mainstream competition such as Walmart, Amazon, and Home Depot. Sales at Kmart and Sears have plummeted to the point that they’ve begun offering customer incentives for members to shop at the stores, supposedly attempting to change its focus from “company” to “customer.”

Sears Holdings CEO and Chairman Edward S. Lampert spoke about the closings.

“The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability. We’re focusing on our best members, our best categories, and our best stores as we work to accelerate our transformation.”

CBS News Detroit mentions that Sears Holdings is planning to close these particular stores in order to liquidate store inventory and help gain the company a “meaningful level” of cash, even from the sale or sublease of the real estate property itself. While the Kmart company is attempting to raise cash by closing stores and liquidating assets, it’s making this adjustment to recoup losses from its fourth quarter free-fall of $580 million. According to the source, the Kmart head-company only saw a loss of $159 million just a year prior.

During Sears Holdings’ fourth quarter, even including holiday spikes, the company experienced a 6.9-percent decline in sales at Sears and a 7.2-percent fall at Kmart. The source states that this is a key indicator of the company’s health. CBS News Philadelphia noted that in 2015, Sears’ stock sank 37 percent due to its poor sales. So far this year, it has continued to drop another 12.4 percent. The news source mentions that Sears Holdings hasn’t been a profitable company since 2012.

The source also states, “The company recently took on $1.2 billion in debt financing in order to help ‘transform’ its business.”

For the most part, as far as employment is concerned at the targeted stores, Sears Holdings mentioned that an “overwhelming majority” of its employees hold part-time positions, not that this fact cushions the blow. While the company didn’t state how many of its workers would be affected by the store closings, once the stores are closed, these employees would be given the opportunity to apply for positions at other Sears or Kmart locations. However, it would not be a transfer; the employees would have to go through the application process as a previous employee.

All in all, what do you think about the Sears and Kmart store closings? Do you know anyone who will be affected by the decision? Feel free to share your thoughts in the comments below.

[Photo by Scott Olson/Spencer Platt/Getty Images News]

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