Sears Holdings Corp. discredited a report Thursday that says it will be shuttering 116 Sears and Kmart stores, resulting in the layoffs of more than 6,000 workers.
Seeking Alpha, a crowd-sourced financial news and market tracker, reported that Pennsylvania, Michigan and Indiana will see the most closings. Broken down, closures include 55 Kmart stores, 30 Sears stores and 31 Sears Auto Center locations, according Seeking Alpha, citing liquidation sale notices. Many of the closings are expected to happen before Christmas.
Continue Reading Below
Shares rose on the report.
In an email sent to The Associated Press, Howard Riefs, a Sears spokesman, said that the store count and list of closures was inaccurate but declined to offer details on the closings. He noted that the Hoffman Estates, Illinois-based company will update its store count in its third-quarter financial results next month.
"As we have previously communicated, adjusting our physical footprint to focus on our best performing locations is a core component of our transformation. While this has resulted in store closures where appropriate — decision that we do not take lightly — we continue to have a substantial nationwide footprint with a presence in many of the top malls in the country."
Riefs also noted that counting the closings of Sears stores and Sears Auto Centers as separate units is not "entirely accurate." Sears Auto stores are typically attached to the stores, he said.
The layoffs come as Sears' financial struggles are worsening under its CEO Edward Lampert, the company's largest shareholder. Sears is trying to reverse mounting losses and sales drops in recent years by cutting costs, reducing inventory and selling assets to return to profitability. At the same time, it's shifting its focus from running a store network to operating a member-focused business called Shop Your Way. Its biggest albatross remains its stores, which have been criticized for being outdated and shabby.
But those turnaround efforts haven't been gaining traction. For the quarter ended Aug. 2, Sears lost $573 million, up drastically from $194 million in the year ago period. That brought the retailer's losses for the second half of the fiscal year to $975 million.
Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005 about two years after he helped bring Kmart out from under bankruptcy protection.
On Monday, Sears said it was looking to raise more cash, announcing that it is planning a rights offering that may raise up to $625 million. The company also said Monday that it struck a leasing deal with European fashion retailer Primark. Sears' lease agreements with Primark are for seven stand-alone stores in malls. Sears will still have a significant presence at six of the locations.
Sears had announced that it expects to close about 130 stores in 2014, which includes a combination of leased and owned locations. To date, the retailer has closed 95 locations. Following the closures, the company will operate 1,900 Sears and Kmart stores.
Riefs noted that represents 200 million square feet throughout the U.S.
"Few companies have this scale and reach," he added.
Shares rose more than 4 percent, or $1.53, to close at $35.95 on Thursday. Still, the stock is down 20 percent in the past year.
Follow Anne D'Innocenzio at http://www.Twitter.com/adinnocenzio