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updated: 1/21/2014 5:37 PM

Sears to close its flagship State Street store

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  • In this photo from 2009, Steve Barrera of Chicago gets in some last-minute holiday shopping at a Sears store in Chicago.

      In this photo from 2009, Steve Barrera of Chicago gets in some last-minute holiday shopping at a Sears store in Chicago.
    Associated Press File Photo

  • Exterior of the Sears Centre in Hoffman Estates.

      Exterior of the Sears Centre in Hoffman Estates.
    Photo by Mark Black


Hoffman Estates-based Sears said Tuesday it plans to close its flagship store in downtown Chicago.

The Sears store, which opened in 2001 at 2 N. State St., is expected to close by early April. A liquidation sale starts on Sunday, said Howard Riefs, a spokesman for parent company Sears Holdings, which also owns Kmart stores.

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"These decisions are never easy," said Riefs. "But the store has lost millions of dollars since opening and we can no longer continue to support the store's operating losses. The State Street store's operational performance has been poor through much of its existence."

Sears, which has been struggling overall in recent years, said the State Street store has about 160 employees. Those workers could receive severance and have the opportunity to apply for open positions at other Sears or Kmart stores. Most of the associates are part-time and paid by the hour, Riefs said.

Sears notified Chicago officials and the landlord in advance of Tuesday's announcement, he said.

The store closure is part of a series of actions Sears said it is taking to cut costs and change its business model.

"These actions will better enable us to focus our investments in stores that are performing and in serving our customers and members through integrated retail -- at the store, online and in the home -- that is key to our transformation," Riefs said.

Sears will continue to serve its Shop Your Way members and customers via online, mobile and phone and at other stores.

Sears Holdings will continue its presence on the 4th floor of the 2 N. State St. building, where it has more than 150 people who work in its online and information technology business units, Riefs said.

"We have entered in to a new lease for the 4th floor to occupy about 20,000 square feet," he said. "We have an option to build out the balance of the floor (30,000 square feet) for our future business needs."

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