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What: Shares of Sears Holdings (NAS: SHLD) were relegated from the clearance rack to a back-alley garage sale today, falling 25% after management said it would close up to 120 stores.
So what: The struggling retailer has seen Kmart sales fall 4.4% quarter to date and Sears domestic sales fall 6%, finally causing management to throw in the towel. The company said it would close 100 to 120 Kmart and Sears stores to reduce costs and attempt to generate revenue from the real estate.
Now what: Kmart and Sears have both lost any luster they once had after Eddie Lampert took over the combined company. The plan to sell or lease the real estate may generate some cash, but with brick-and-mortar retailers struggling, I don't see much demand for the spaces that will become available. I would abandon Sears at all costs and stick to stronger retailers like Target (NYS: TGT) and Wal-Mart (NYS: WMT) as we head into 2012.
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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.The Motley Fool owns shares of Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of Wal-Mart Stores. Motley Fool newsletter services have also recommended creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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