Reports: Sears to cut 250 jobs at Hoffman Estates headquarters
Sears is cutting around 250 employees at its Hoffman Estates headquarters beginning in late October, the company said in a letter, obtained by Crain's Chicago Business to the Illinois Department of Commerce and Economic Opportunity. A Sears spokesman confirmed the news to Business Insider.
“Affected employees will be placed on a paid administrative leave effective immediately for the time prior to the employment termination date,” Sears said in the Aug. 29 letter.
The letter said Sears' holding company was not planning to close the Hoffman Estates headquarters or relocate, Crain's reported.
“The employment separations are expected to be permanent; however, there are no current plans to close the entire facility,” the letter said.
The news follows the holding company announcing Aug. 7 that the Sears store at Stratford Square Mall in Bloomingdale will be among 26 Sears and Kmart stores that will close nationwide in October. With that store's closing, the one-time retail giant will have suburban locations at only Woodfield Mall in Schaumburg, Spring Hill Mall in West Dundee and stores in North Riverside and Chicago Ridge.
Many of the stores included in the new round of closures will be shut down by the end of the year. Liquidations are expected to start in September and stores will close by December, Sears spokesman Larry Costello told Business Insider on Wednesday, but he wouldn't say how many stores.
Costello told the Chicago Tribune the only remaining Kmart in Illinois will be the Des Plaines location, with the closing of the Kmart in Bridgeview.
Transform Holdco, the company created by former President and CEO Edward Lampert that bought Sears Holdings Corp. in a bankruptcy sale last year, said the closures were necessary due to a weak retail market and “differences with Sears Holdings over our purchase agreement.”
The company did not specify what those differences were, but Bloomberg News reported earlier that a federal court judge ruled claims made by Lampert's ESL Investments hedge fund against the estate of Sears Holdings have so little priority that they are likely worth a fraction of what they are demanding. The decision likely means ESL and other creditors will get far less than the $718 million they're seeking from what's left of the old company to pay remaining claims, according to the Bloomberg story.
In response to a Business Insider inquiry about the closings on Friday, the company said: “As we continue our transformation efforts, we are working closely with our stakeholders, and evaluating our network of stores, operations, and business strategy in order to stabilize the business and support a long-term path to profitable success.”
The company has said its strategy will move away from the big box stores of the past and instead focus on expansion of smaller stores, which includes its Home & Life stores and Sears Hometown stores.
Lampert's ESL Investments Inc. hedge fund won a $5.2 billion bid to salvage Sears Holdings Corp. after it filed for bankruptcy in October 2018. The new company, Transform Holdco, took over 425 stores and the rest of the company's assets.