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Sears closings: At least 100 stores to be shuttered

Sears closings intended to shore up company's profits. Sears closings will affect Kmart stores, too, but not word on layoffs.

By Anne D'Innocenzio and Michelle ChapmanAP Business Writers / December 27, 2011

In this file photo from last month, the Sears logo is seen on a television for sale in Springfield, Ill. In a memo to employees Dec. 27, 2011, Sears said it would be closing at least 100 stores. The Sears closings will also affect Kmart stores.

Seth Perlman/AP/File

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NEW YORK

Sears Holdings Corp. plans to close between 100 and 120 Sears and Kmart stores after poor sales during the holidays, the most crucial time of year for retailers.

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The Sears closings are the latest and most visible in a long series of moves to try to fix a retailer that has struggled with falling sales and shabby stores.

In an internal memo Tuesday to employees, CEO and President Lou D'Ambrosio said that the retailer had not "generated the results we were seeking during the holiday."

Sears Holdings Corp. said it has yet to determine which stores will close but said it will post on http://www.searsmedia.com when a final list is compiled. Sears would not discuss how many, if any, jobs would be cut.

The company has more than 4,000 stores in the U.S. and Canada. Its stock dropped $8.67, or 18.9 percent, to $37.18 in morning trading. The shares dipped to their lowest point in more than three years at $36.51 during the first few minutes of trading.

The company's revenue at stores open at least a year fell 5.2 percent to date for the quarter at both Searsand Kmart, the company said Tuesday. That includes the critical holiday shopping period.

Sears Holdings said the declining sales, ongoing pressure on profit margins and rising expenses pulled its adjusted earnings lower. The company predicts fourth-quarter adjusted earnings will be less than half the $933 million it reporter for the same quarter last year.

Sears Holdings also anticipates a non-cash charge of $1.6 billion to $1.8 billion in the quarter to write off the value of carried-over tax deductions it now doesn't expect to be profitable enough to use.

Sears said it will no longer prop up "marginally performing" stores in hopes of improving their performance and will now concentrate on cash-generating stores.

"These actions will better enable us to focus our investments on serving our customers," D'Ambrosio said.

The weaker-than-expected performance reflects what analysts say is a deteriorating outlook for the retailer.

The results point to "deepening problems at this struggling chain and renewed worries about Searssurvivability," said Gary Balter, an analyst at Credit Suisse. "The extent of the weakness may be larger than expected but the reasons behind it are not. It begins and some would argue ends with Sears' reluctance to invest in stores and service."