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Sears to close 89 stores
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January 4, 2001: 3:31 p.m. ET
No. 2 retailer to trim 2,400 jobs, mostly at auto unit, hardware stores
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NEW YORK (CNNfn) - Sears, Roebuck and Co., the No. 2 U.S. retailer, is closing 89 underperforming stores and trimming 2,400 jobs as part of an ongoing restructuring aimed at improving profitability.
Sears (S: Research, Estimates), based in Hoffman Estates, Ill., said it already has begun the closings, which primarily affect the company's specialty stores, including 53 NTB auto service outlets and 30 hardware stores. The company also is closing four full-line stores.
The announcement came as Sears reported a 1.1 percent decline in December same-store sales, a closely watched figure that measures sales at stores open at least a year. Total sales decreased 0.1 percent in the month including the crucial holiday season.
 "Our actions reflect our heightened focus on productivity and returns. We will continue to identify opportunities to more effectively deploy resources and enhance overall company profitability of Sears off-the-mall businesses," CEO Alan Lacy said.
Lacy, who took over the company's top spot in October from the retiring Arthur Martinez, hinted at the store closings back in November, when he met with analysts for the first time in New York.
At that meeting, Lacy filled Wall Street in on the company's strategy to launch a new store format, The Great Indoors, to compete with Home Depot (HD: Research, Estimates), but also offer "softer" home improvement services such as interior decorating consultants.
"This is the realization of Alan Lacy's strategy to put Sears back on track," Robertson Stephens retail analyst Bill Dreher said. "They need to prune away the underperforming assets. They need to focus on The Great Indoors type format and realize the potential of services-type businesses and the Internet."
The company also said it expects to take a $150 million pre-tax charge related to the store closings in addition to a $115 million pre-tax charged related to losses at Sears Termite and Pest Control.
Although Sears has posted better-than-expected earnings results in recent quarters, its sales have essentially remained sluggish compared to those of other competitors such as Wal-Mart (WMT: Research, Estimates) and Kohl's (KSS: Research, Estimates).
Appliances and electronics have remained strong performers for the company, but sales of apparel and other softlines have struggled.
Sears shares gained 38 cents to $36.41 in late trading Thursday. 
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