As the all-important holiday season bears down, struggling retailer Sears just got a major boost.
Owner Transformco has secured $250 million in new capital as it battles to bring the veteran big-box chain and its sibling, Kmart, back from the brink.
The cash infusion was provided by the firm’s owners, including Chairman Edward Lampert, and an unnamed third-party investor.
However, the surprise lifeline comes with some not-so-good news: Ninety-six Sears and Kmart stores will shutter their doors by February 2020, leaving 182 remaining locations between the two nameplates.
Liquidation sales will kick off at these units beginning on Dec. 2. “We will continue to evaluate our Sears and Kmart footprint, consistent with our overall retail and service strategy,” the company said, hinting at the possibility of additional closures in the future.
Transformco cited “a difficult retail environment and other challenges” for the drastic move.
When the firm acquired Sears and Kmart out of bankruptcy court for $5.2 billion earlier this year, Lampert said his offer was the best on the table to keep stores open for business and save thousands of jobs.
But the new store closures and the need for more financing make evident Sears’ continued struggles to draw shoppers and compete with steep competition from rivals, including Target and Walmart.
Nonetheless, Transformco is maintaining a positive outlook as it forges ahead on its turnaround campaign. The company said it expects “to realize a significant return on our extensive portfolio of owned and leased real estate.”
These assets include logistics solutions firm Innovel, Sears Home Services, the Shop Your Way membership program, and its Kenmore and DieHard brands. The company also recently snapped up Sears Hometown, a network of more than 400 independently-owned, dealer-managed smaller-format stores that specialize in home products including appliances, lawn and garden, tools and sporting goods.