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Sears Holdings Corporation says it will close as many as 120 of its stores after poor sales during the holidays. That's another blow to the effort to revitalize the chain since Sears merged with Kmart in 2005. NPR's Cheryl Corley reports.
CHERYL CORLEY, BYLINE: Sears Holdings has more than 4,000 Kmart and Sears stores in North America, and there's no word yet on which of the more than 100-plus stores it will close. But outside a Sears in downtown Providence, Rhode Island, Pete Connolly(ph) hoped it's not the store where he shops. [POST-BROADCAST CORRECTION: NPR's Cheryl Corley mistakenly said shopper Pete Connolly was outside of a Sears store. Connolly was at a shopping mall in Providence, but the mall does not contain a Sears.]
PETE CONNOLLY: We love Sears, especially this year. I made an effort to buy more things at Sears this year than anyplace else - like Home Depot or Lowe's - only because they back their product with their service.
CORLEY: Pushing a shopping cart outside a Kmart in Cranston, Dottie Delfino(ph) called word about the store closures terrible news.
DOTTIE DELFINO: Well, I felt so bad. I called my daughter-in-law; I said, guess what? Kmart is closing.
CORLEY: Sears says it will put the closures on a company website when the list is final. Sales at Sears and Kmart fell a little more than 5 percent during the critical eight-week holiday shopping period. Kmart's decline, according to a company statement, was due to a drop in clothing and consumer electronic sales, plus fewer layaways. Sears also cited lackluster consumer electronics and home appliance sales. Its clothing sales were flat, although it did see an increase in Lands' End products.
Nancy Koehn, a historian at Harvard Business School, says the Sears brand has been on a slow decline for at least 15 years.
NANCY KOEHN: Wal-Mart, Target, and then the big-box retailers, right, have eaten Sears as competitive lunch.
CORLEY: The tough economy hasn't helped, either, but Koehn points a finger of blame at Sears itself. She says its decline accelerated when Kmart and Sears merged. She says under the leadership of Chairman Edward Lampert, service and store remodeling was cut.
KOEHN: Lampert and company viewed that very much as a cost center, and so they just consciously let the stores deteriorate.
CORLEY: Which she says made the store uninviting. Sears has announced numerous closings this year, but this is the largest group of closures to date. The company president says closing marginally performing stores will allow it to concentrate on the cash generators, and focus on serving customers.
Sucharita Mulpuru, a retail analyst at Forrester Research, says it's not uncommon to see the closing of stores, and the decision to cut Sears and Kmart stores. It's healthy.
SUCHARITA MULPURU: You know, this probably is a harbinger for more store closures. But, you know, let's also keep in mind that this represents, you know, I think less than 3 percent of all the stores that Sears has in North America.
CORLEY: But in Coeur d'Alene, Idaho, where there's only one Sears outlet, Staci Sanborn(ph), a stay-at-home mom, says a closure there would definitely matter to her. She shops at the store two to three times a month.
STACI SANBORN: You know, here in Coeur d'Alene, it's hard to find a lot of stores that - reasonable prices that have a lot of variety for families. And I guess I'd probably have to go to Spokane.
CORLEY: About an hour's drive away.
Sears says closing the 100-plus stores and selling off inventory will generate up to $170 million, with additional proceeds expected from leasing or selling the locations that will shut down.
Cheryl Corley, NPR News. Transcript provided by NPR, Copyright NPR.