News From Terre Haute, Indiana

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December 28, 2011

Company: About 120 Sears, Kmart stores to close

Unknown if Valley stores are on list

TERRE HAUTE — Kmart and Sears – two venerable American retailers – are facing store closings in the face of faltering sales.

But it was not known late Tuesday whether the Terre Haute Sears and Kmart stores will be among the 100 to 120 closings announced earlier in the day by Sears Holdings Corp., the parent company for both retailers.

“It’s kind of weird because it’s been around so long,” said Darleen Vaeth of Terre Haute, a shopper who was about to enter the Kmart store on U.S. 41 South Tuesday afternoon. “We need more stores in Terre Haute,” not fewer, she said.

Kmart employees reached Tuesday said they did not know whether their store would be on the list, which is expected to be published at www.searsmedia.com, a website operated by Sears Holdings Corp.

“No individual closings have been announced at this time,” said a recorded message from Kim Freely, manager of corporate public relations for Sears Holdings.

“We’ll just hope for the best, that we won’t be on that list,” said one Kmart employee who learned of the impending store closings through news reports Tuesday morning.

Sears and Kmart have had stores in Terre Haute for decades. In 1929, Sears, Roebuck and Co. operated a store at Fifth and Ohio streets downtown. A few years later, Sears was selling products at 660 Wabash Ave. where it remained until about 1970 when it moved to Honey Creek Mall.

Kmart has its earliest roots in Terre Haute as S.S. Kresge, a “five and dime” store started by Sebastian Kresge in 1899. Kresge stores would eventually make way for larger “Kmart” stores. Before moving to U.S. 41 South, Kmart operated Terre Haute stores at 25th and Wabash and on the east side of U.S. 41 across from Honey Creek Mall.

Sears Holding Corp. stock fell 27 percent on the news of the closings Tuesday.

In a news release, Sears Holdings Corp. announced that Kmart and Sears have seen weaker sales, especially in the consumer electronics and apparel categories. Fourth quarter gross earnings were expected to be about half of what they were a year ago, the company, based in Hoffman Estates, Ill., announced.

Sears Holdings Corp. operates more than 4,000 stores in the U.S. and Canada, so the closing of even 120 stores would be a small percentage of the total. However, the company also stated Tuesday that it will no longer prop up its weaker stores, implying that further closings are possible.

“While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment,” the media release states.

Hedge-fund billionaire Edward S. Lampert combined Sears and Kmart in 2005. However, industry analysts say that did not lead to better performance.

“Sears has not remodeled its old and aging stores,” noted the Motley Fool, an investment and financial education website. “No wonder customers have shied away and chosen to visit more modern and comfortable stores.” Rivals, such as Macy’s and Target, have stolen customers away, the website stated last month.

Both Sears and Kmart announced the shedding of hundreds of jobs in North America earlier in the year. There has been no word yet how many jobs will be affected by the closings announced Tuesday.

Arthur Foulkes can be reached at (812) 231-4232 or arthur.foulkes@ tribstar.com.

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