Sears to close 100 to 120 Kmart, Sears stores

Sears Holdings Corp. is staying in Illinois after gaining a series of tax breaks, but the company announced Tuesday it plans to close between 100 and 120 Kmart and Sears stores because of declining sales and the tough economic situation for big-ticket items.

The company has not yet determined which stores will be closed, but said in a news release it plans to close poor-performing stores instead of keeping them open while working to improve their sales.

“We will carefully evaluate store performance going forward and act opportunistically to recognize value from poor-performing stores as circumstances allow,” Sears Holdings said in a news release.

The store closures and sales of inventory and property are expected to generate between $140 million and $170 million, the company said. Sears Holdings also plans to decrease its 2012 inventory by $300 million from the $10.2 billion it held at the end of the third quarter this year.

The announcement of store closings comes after sales dropped 5.2 percent at Sears and Kmart stores for the eight-week period ending Dec. 25. Sears' drop in same-store sales was attributed to lower sales of electronics and home appliances, while Kmart's decline reflects decreases in electronics, apparel and layaway sales, the company said.

The Hoffman Estates-based company plans to release a list of stores to be closed once they are chosen, but did not say when the shops will shut down.

The tax breaks that kept the company in Illinois were made official Dec. 16 when Gov. Pat Quinn signed a bill granting Sears Holdings $150 million in income tax relief over 10 years and $125 million in property tax cuts over 15 years.