Sears Holdings Gets Drilled: Closing up to 120 Stores

Sears Holdings did not have a happy holiday, according to guidance it released this morning. The department store and discount store retailer said it will close between 100 and 120 Kmart and Sears full-line stores.

Kmart’s holiday season sales were down 4.4% compared to last year, and domestic Sears stores saw a 6% drop in sales. Overall, Sears Holdings’ sales were down 5.2% this holiday season, and that dragged its year-to-date sales down 2.6% for the year.

While retail traffic appears to be bringing Sears Holdings down, the company has seen strong growth in its ecommerce channels.

In its third-quarter earnings announcement, issued Nov. 17, Sears Holdings president and CEO Lou D’Ambrosio said he was pleased that its online sales were up 19% for the year. Sears did not announce its holiday-season ecommerce totals.

According to the Brand Keys 2011 Customer Loyalty Engagement Index, Sears ranks last out of seven in the department store category, and Kmart is third out of three in the discount store category.

Excluding its Kenmore, Diehard, Craftsman and Lands’ End brands, Brand Keys founder Robert Passikoff says Sears and Kmart don’t offer much else that gets consumers excited.

“They offer a handful of stuff, but the rest of the brands are not things people are dying for,” Passikoff said.

Though Passikoff notes Sears has made strides with its Lands’ End store-within-a-store locations, a consumer does not need to shop Sears to get that brand. The same goes for Craftsman, which Sears started distributing through ACE Hardware stores as well this year.

Sears has received some recent praise for its ecommerce site. Sears.com had the seventh highest score for ecommerce merchandising in the 2011 MCM Awards, and its home page was considered the sixth best.

And Sears’ mobile site was the top Cyber Monday performer according to a study by Compuware.

But its Facebook efforts are far behind its department store rivals. Of 17 retailers it looked at for a recent study, Janice Smithers is senior media strategist for Covario’s analytical insight services, said Sears finished somewhere in the middle of the pact.

And it seemed many of the people who “Liked” Sears on Facebook did so to voice complaints this holiday season.

Even the festive post, “Merry Christmas Eve Sears fans! What is everyone leaving out for Santa and his reindeer tonight?” inspired followers to voice concerns with their shopping experience, Smithers said. And a post offering a 20% discount was met with rants about discount exclusions, customer service and delivery.

“Other merchants are not immune to this sort of thing either, but it just appears to be much more prevalent when it comes to Sears,” Smithers said, noting Sears did its best to respond to customer complaints. “However, it is doubtful their responsiveness had a positive effect on the brand. The fan concerns seem to be too deep seeded for that.”

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