Sears Holdings plans to close scores of Sears Auto Center locations and underperforming Kmart pharmacies as part of its effort to cut costs by $1.25 billion this year.
The Hoffman Estates-based retailer already has closed 150 stores nationally — including two in downstate Illinois — in cost-cutting efforts, but more needs to be done in this “very challenging retail environment,” Chairman and CEO Edward Lampert said Friday in a news release.
“We need to take further action,” he said.
The closures and other steps the company already has taken add up to $700 million in annual savings. Closing 50 Sears Auto Center locations and 92 pharmacy operations in certain Kmart stores will help the company reach its $1.25 billion cost-cutting goal, which it increased from a previous target of $1 billion.
The embattled retailer did not give a timeline for the store closures. Company spokesman Chris Brathwaite said he did not have a list of which locations are scheduled to close.
The company also plans to eliminate senior management roles at Sears and Kmart, though it has not said how many.
Some employees were notified Friday that they would be losing their jobs, Brathwaite said. The rest will be told in the coming weeks.
“We obviously don’t take these decisions lightly,” he said. “But in order to be a more competitive retailer and return the company to profitability, we need to look for ways to streamline the operations.”
In February, the company hinted that the auto centers business could find itself on the chopping block. Sears previously signed a $900 million deal to sell its Craftsman brand to Stanley Black & Decker. The company at the time said it would continue to look for options for two other popular brands, Kenmore and DieHard, and its Sears Home Services and Sears Auto Center businesses.
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