More than 100 Sears, Kmarts will close; no word yet on Cape stores

The future of two of Cape Girardeau's most venerable retailers -- and about 170 jobs -- became uncertain Tuesday when the parent company of Kmart and Sears Grand announced it was closing as many 120 stores nationwide after a disastrous holiday shopping season.

Sears Holdings Corp., a pillar of American retailing that famously began with a mail-order catalog in the 1880s, cited a combination of lower sales and expense increases in its decision.

No individual stores were named Tuesday, though it was believed that news would be made public today on the company's website.

Kmart's Cape Girardeau store manager Nathan Miller said his understanding was that the store here on Kingshighway was not going to close, but Sears Grand manager Doug Abner said he had no information. Kmart employs about 70 workers, and Sears Grand on Siemers Drive has 100 employees.

"They haven't announced anything to us, in terms of what is or isn't happening in terms of specific stores," Abner said. "All we know is essentially what the press release said this morning."

Asked about unease among employees, Abner said he hadn't had a chance to talk to them, but he didn't think they were worried.

"I'm not particularly worried myself," he said. "Maybe that's just me."

Callers to Sears Holdings Corp.'s public affairs department were told not to leave messages about the closings and that an announcement would be made public on the company's website.

Both stores have long histories in Cape Girardeau. The Sears store's previous location on William Street was a staple of the Town Plaza Shopping Center since it opened in 1962. The store was relocated to a new 149,000-square-foot building on Siemers Drive in 2005.

Shortly before the new store opened, Sears paid $10,000 toward landscaping costs for 2.5 acres on the northwest corner of the Route K-Interstate 55 interchange.

Kmart has been a fixture in Cape Girardeau, opening in its 64,500-square-foot building in 1974. A decade later, Kmart "restyled its store," refurbishing it with new fixtures and equipment. In 1989, a 20,000-square-foot extension was added to the Kmart facility. The Kmart automotive repair shop was discontinued and an expanded line of garden and lawn equipment was added.

John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, said it would be a "significant loss" to the community should either or both of the stores close.

"A lot of people would be affected," Mehner said. "But this is a strong retail area. I'd like to think as strong as our retail is, our stores would be safe."

Specific store performance numbers were not provided, but in a news release, Sears Holdings Corp. announced that Kmart sales were down 4.4 percent over last quarter and Sears was down 6 percent from last quarter.

Nationally, the announcement sparked speculation about whether the retailer can avoid a death spiral fed by declining sales and deteriorating stores. The company declared Tuesday it would no longer prop up "marginally performing locations." The company also pledged to refocus its efforts on stores that make money.

Sears' stock quickly plunged, dropping 27 percent. Sears Holdings has watched its cash and short-term investments plummet by nearly half since Jan. 31, from about $1.3 billion to about $700 million.

The projected closings represent only about 3 percent of Sears Holdings' U.S. stores. And the company has actually added stores since the Sears-Kmart merger in 2005. It has about 3,560 stores in the U.S., up from 3,500 right after the merger, thanks to the addition of more small stores.

The store closings were expected to generate $140 million to $170 million in cash as the company sells down their inventory. Selling or subleasing the properties could generate more money.

In addition to the closings, the company announced that revenue at stores open at least a year fell 5.2 percent for the eight weeks ended Dec. 25, a crucial time because of the holiday shopping season.

As rivals Wal-Mart and Target Corp. spruced up stores in recent years, Sears Holdings struggled with falling sales and perceptions of dowdy merchandise. Kmart helped create the discount-store format that Wal-Mart stores came to dominate.

Kmart, which started as a five-and-dime in Detroit in 1899, once commanded a retail empire that included Waldenbooks, Borders, Office­Max and Sports Authority before spinning them off.

The Associated Press contributed to this report.

smoyers@semissourian.com

388-3642

Pertinent addresses:

330 Siemers Drive, Cape Girardeau, MO

11 S. Kingshighway, Cape Girardeau, MO