The company has decided to close down 100 to 120 Sears and Kmart stores after a continuous drop in their sales, especially during the Christmas holidays. Sears Holdings Corporation has come to a point where many of its stores are not adding to revenues and instead have become an overhead for the company. The profits are continuously reducing and the situation has become alarming for the company management.
The closing down of stores has been thought of to let the company survive with its revenue generating outlets and eliminate those that just are adding to the costs. The CEO and president of the corporation, Lou D'Ambrosio, told his employees about the decision but did not clearly mention which of the stores will be shut down. “The retailer had not generated the results we were seeking during the holiday," he said. "These actions will better enable us to focus our investments on serving our customers," D'Ambrosio added.
The retail chain is facing difficulties in the tough competition with giant retailers, who have been investing greatly into their services and products. Through this strategic move of reducing its presence, the company will be able to focus on its profitable outlets and then compete with a clear marketing approach.
As it has not been made clear which stores exactly are going to be closed, there is an uncertainty among the employees about the future of their jobs. The joblessness is already a major concern due to economic instability in the country and businesses are striving to continue in these hard conditions.
The top management is motivated to bring the company to a better standing again through a new strategy. "We will bounce back and become stronger than ever," the CEO of the company said in his message.
The deteriorated performance is being criticized by analysts, who feel the reason for the decline in sales is the poor service oan the stores.