Sears has informed the Tennessee Department of Labor and Workforce Development that the closure of its store at 3344 Austin Peay Highway, which the retailer announced in January, will affect 91 workers.
Shuttering the Memphis store is part of 19 store closures announced in the fourth quarter by Sears, which is somewhat of a retail anomaly in that it has not yet benefited from a consumer spending rebound to the extent competitors like Target and Walmart have.
“Domestic Sears and Kmart stores have been underperforming their retail peers on top line growth for many years, and the combined domestic entity has lost almost $6.5 billion or 15 percent of its 2005 domestic revenue base of $45 billion (the two companies merged in March 2005),” according to a Fitch Ratings report in January.
The tentative close date for the Memphis store on Austin Peay is April 3. The rest of the closures are spread from Florida to Ohio and Illinois, with six of the announced closures concentrated in Illinois.
In third quarter 2010, Sears also closed four stores in its Kmart segment, Sears reported in a quarterly filing in late 2010.
“We recorded charges related to these store closings during the quarter of $4 million in 2010,” the filing reads. “Total store closing charges recorded during the first nine months of fiscal 2010 were $13 million, of which $5 million was recorded in cost of sales for inventory markdowns and $8 million was recorded in selling and administrative expenses for store closing, severance and lease costs.”
The retail sector was hit especially hard by the recession, with consumer spending still not at levels it was pre-recession and with recent winter storms likely keeping many consumers from shopping at all.
In general, though, consumers appear to be slowly coming back around to opening up their wallets more.
“Retailers in 2011 will be intent on actively growing their businesses and improving customer insight capabilities, in addition to continuing efforts begun during the economic downturn to stabilize operating costs and focus on financial discipline,” according to a report from the National Retail Federation’s research and education arm, the National Retail Federation Foundation, and tax firm KPMG LLP.