The parent company of Sears and Kmart plans to close 96 stores by February, including two in Illinois.
That will leave Sears and Kmart with just 182 stores, fewer than half the number remaining when Transformco bought the retailer out of bankruptcy earlier this year. Transformco is controlled by Sears' former CEO Edward Lampert and his hedge fund.
Transformco also secured $250 million in financing in the run-up to the holiday season from lenders, including Lampert and his hedge fund, and a third-party investor, the company said in a statement Thursday. Lampert's portion of the financing was significant but less than half the total sum, Reuters reported Thursday, citing people familiar with the transaction who were not authorized to publicly discuss portions of the deal.
The new capital will support efforts to focus on "competitive strengths" while making cuts to pieces of the business that have struggled, the company said in its statement.
Sales at the closing stores, including Sears stores in West Dundee and Peoria, are expected to start Dec. 2.
Less than a year ago, Lampert and his hedge fund said they believed Sears could succeed as a profitable company and that their bid to rescue the bankrupt retailer from liquidation would keep stores open and save jobs.
But the company, once the nation's largest retailer, said it has since faced "a difficult retail environment and other challenges."
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The company opened three smaller stores selling appliances, home services and smart home products in May. But in August, it announced plans to close 26 Sears and Kmart stores this fall and told the state it planned to lay off about 250 employees at its Hoffman Estates, Ill., headquarters.
Transformco said Thursday it plans to focus on its better-performing stores and its service businesses, and that it expects to "realize a significant return on our extensive portfolio of owned and leased real estate."
The company also said it would benefit from the recent acquisition of Sears Hometown, a company Sears previously owned but spun off in 2012, by one of its affiliates. Sears Hometown has more than 400 stores, Transformco said.
After the latest round of closures, just three Sears department stores are expected to remain open in Illinois. Those stores are in Chicago Ridge, North Riverside and Schaumburg, along with a Kmart in Des Plaines and a handful of Sears Hometown and Appliance Outlet stores.
A company spokesman could not immediately be reached for additional comment. Transformco's statement did not rule out additional store closures.
"We will continue to evaluate our Sears and Kmart footprint, consistent with our overall retail and service strategy," the company said Thursday.
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