Sears to close another 28 Kmart locations

Sears Holdings said Thursday that it would close another 28 Kmart locations as it continues its cost-cutting campaign amid a precipitous decline in the department-store sector.

The company also posted declining sales and profits, but the results outpaced analyst expectations and led to a surge in its stock price.

The Kmart closures add to a list of 330 Sears or Kmart locations shuttered or set to be closed later this year as the retailer seeks stability.

The chain said it would notify Kmart employees later today at the affected locations and publicly release a list of closing stores in the afternoon.

The company, which will still have about 1,000 stores after the closures, said in a public filing earlier this year that it believes it has at least another 12 months of cash to continue operating. 

Sears is betting on a customer loyalty program, Shop Your Way, to help lead a turnaround. In addition to new ways for members to earn points, Sears will analyze the members' past purchases and preferences in order to tailor its suggestions. The company also won investors' favor with a deal announced in July to sell its Kenmore appliance brand on Amazon. 

Sears shares rose 6.42% to $9.12 in morning trading.

"We will continue to right-size our store footprint to ensure we are positioned to meet the realities of the changing retail environment,'' Rob Riecker, Sears Holdings' chief financial officer, said in a call with investors. 

Sales at Sears and Kmart stores open at least a year, a key metric in the retail industry, tumbled 11.5% for the period, the company said Thursday. S&P Global Market Intelligence analysts had estimated a same-store sales decline of 7.1%.

With many major retailers shuttering stores as shoppers increasingly browse online, Sears' latest round of closures was not unexpected, analysts said.

Sales at Sears and Kmart stores open at least a year, a key metric in the retail industry, tumbled 11.5% for the period, the company said Thursday. S&P Global Market Intelligence analysts had estimated a same-store sales decline of 7.1%.

With many major retailers shuttering stores as shoppers increasingly browse online, Sears' latest round of closures was not unexpected, analysts said.

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