Sears Holdings Corp. is closing 40 additional Sears and Kmart stores by February 2019, including two in Southern California, the company announced this week.
The announcement comes less than a month after the company — once the United States' dominant retailer — filed for Chapter 11 bankruptcy. Since the Oct. 14 bankruptcy filing, Sears has announced 182 store closures.
Two of the stores set to close by February are in California: the Sears at La Cumbre Plaza in Santa Barbara and the Kmart at 26471 Ynez Road in Temecula. All told, the company has announced the closure of 18 Sears and Kmart stores in the state since its bankruptcy filing.
Liquidation sales at the stores shutting by February will begin late next week, and Sears Auto stores at these locations will also close, the company said.
Sears’ bankruptcy filing came after decades of decline. In the last five years, it posted losses of $6.8 billion as annual sales plummeted from $36.2 billion in fiscal 2013 to just $16.7 billion in fiscal 2017.
Under the management of hedge-fund billionaire Edward Lampert — who remains the company’s majority stockholder and major creditor after stepping down as its chief executive in the wake of the bankruptcy filing — Sears slashed its retail footprint and workforce in an effort to keep afloat as sales declined.
Since 2013, the Hoffman Estates, Ill., company has closed more than 1,000 stores and cut its workforce from 226,000 employees to 89,000 this February, a number that continues to decline as additional stores shut their doors.
The company also sold off many of its most valuable assets in order to raise cash. In 2014, Lampert spun out the clothing manufacturer Land’s End into a separate company, becoming its biggest shareholder. In 2015, he sold 235 of the company’s prime retail locations to Seritage, a real estate investment trust he created for the deal, raising $2.7 billion for Sears Holdings in the process. And last year, Sears sold its Craftsman tool brand to power-tool company Stanley Black & Decker for $900 million.
But it wasn’t enough. As part of its bankruptcy petition, Sears’ banks agreed to provide a so-called debtor-in-possession loan of $300 million, and is negotiating an additional $300 million in financing from Lampert’s hedge fund, ESL Investments Inc., to help keep the company alive as it restructures.