Same-store sales at Sears for the eight weeks ended December 25 was down 6 percent from the same period last year.
Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business model, Sears CEO Lou D'Ambrosio said in a statement.
The Hoffman Estates, Ill.-based company said the store closures are expected to generate $140 to $170 million of cash from sales of inventory and additional cash is also expected from the sale or sublease of the related real estate. The company said final determination of the stores to be closed has not yet been made.
Excluding the effect of store closures, Sears currently expects to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year.
These actions will better enable us to focus our investments on serving our customers and members through integrated retail at the store, online and in the home, D'Ambrosio said.
Due to the company's performance in 2011, it expects to record in the fourth quarter a non-cash charge of $1.6 to $1.8 billion in relation to a valuation allowance on deferred tax assets. Further, Sears said it may recognize in the fourth quarter an impairment charge on some goodwill balances for as much as $0.6 billion.
Sears currently plans to release financial results for its fiscal 2011 fourth quarter and full year on or about February 23, 2012, before the market opens.
The company's shares plunged 18.84 percent or $8.64 Tuesday morning, currently trading at $36.21.