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Sears Struggle For Survival Continues, Forcing It To Shut Down 66 More Outlets


Sears existed in the market for more than a century and had seen a lot of ups and downs in its financial conditions many times. But since 2005, after the takeover by Kmart and the existence of the online retail market, it has become very difficult for the retail store to maintain its position and generate profits. Even though Sears is currently among the top five retail giants in the US, after Home Depot, Walmart, and similar retail giants, it financially struggling hard to generate revenue and keep their retail outlets functioning. Last month, they have outperformed against the speculations made by Thompson Reuters in regards to their stock prices and revenue for that particular quarter. But for that purpose, they had to shut down more than 200 outlets that were hampering the financial health of the organization.

Now again, they have made an announcement about closing down more 66 retail outlets which would include 49 retail outlets of Kmart and 17 outlets of Sears. They have made some tough decisions like selling their Craftsman tool brand to Stanley Black & Decker in order to generate funds to run their operational activities of their major two brands which are Kmart and Sears for $900 million. Sears investors were shocked by the announcement of Sears shutting down their operational activities if they could not manage to generate sufficient liquid funds to run their functional activities. This directly impacted their share price which dropped by 12.3 percent at that time. The online retail market is flourishing day by day and impacting the physical retail outlet business majorly. Amazon is considered to be the biggest reason for the downfall of the physical retail store business which currently rules the online retail market in the world.

These 66 retail outlets announced by the company are expected to stop their operational activities by the end of July so that the company doesn’t invest anymore in those financially weak locations and focus on those areas where they still hold a good grip on the market. Sears is going through a very rough patch and hence they have decided to delay the repayment of the current loan amount of $500 million for some time. Diverting the funds is one of the potential options left with the company to retain their position and gather liquid funds for executing their operational activities for some time. By doing this, they would have the option of repaying only 20 percent of the loan amount which is $100 million in the next month and rest would be postponed to next January.