Retailer Sears Holdings Corp said it plans to close 100-120 Kmart and Sears Full-line stores and expects its adjusted fourth-quarter EBITDA to more than halve from a year ago.
The company reported $933 million in adjusted fourth-quarter earnings before interest, taxes, depreciation, and amortization last year.
The retailer, home to brands including Craftsman tools and Kenmore appliances, expects to earn $140-$170 million by selling of inventory in affected stores and selling or subleasing store space.
The company also expects store closure and inventory reduction to lower peak inventory in 2012 by $500-$580 million.
Sears also expects to record a non-cash charge of $1.6-$1.8 billion in the fourth quarter related to a valuation allowance on certain deferred tax assets.
For the quarter-to-date, same-store sales at its Kmart unit dropped 4.4 percent and Sears Domestic comparable sales fell 6 percent, the company said in a statement.
The retailer is a victim of the economy, aggressive competition and its own reputation for run-down locations and poor customer service.
Sears shares closed at $45.85 on Friday on Nasdaq.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Anil D'Silva, Roshni Menon)