December 28, 2011- Both Kmart and Sears announced they would be closing nearly 120 stores following a fall in holiday sales. Analysts say the two chain stores might even disappear completely if they cannot turn around sales.
Sears Holding Company holds control of both and announced its plans on Tuesday to shutter the 120 stores. The company, says many industry experts, has had four consecutive years of sales declines in its 2,200 U.S. stores. The same industry insiders feel the chain might join other giant chain stores that have completely shuttered their operations.
Two other notable chains, Borders and Circuit City, tried closing stores to turn around their financial crisis, but ended up going out of business. Wall Street reacted to the news on Tuesday. Sears fell 27% to close at $33.38 with some speculating it may have to enter bankruptcy protection. Less than 12 months ago, Sears’ stock was valued at $95 per share.
The company’s middle class customer, its largest sector of customers, has been hit hard with the woes of the economy and that has resulted in Sears posting 18 consecutive quarters of lower sales.
Sears announced it would channel money and resources to the stores that are performing better. Many analysts feel the stores need a new look and image in order to turn around sales.