Sears Holdings Corp. is in a bad way, and the economy has not helped. The corporation said Tuesday that it will be closing between 100-120 of its Sears and Kmart Full-Line stores, and also that its adjusted EBITDA for the fourth quarter of 2011 is expected to drop by more than half from its level in Q4 of 2010.
Reuters reported that it expects to bring in $140 million to $170 million by selling off the inventory of the affected stores, and by selling or subleasing its store space.
In a statement, the company said that for the latest quarter, same-store sales at its Kmart unit dropped 4.4% and comparable sales at Sears Domestic fell by 6%. Last year, Sears Holdings Corp. reported $933 million in adjusted fourth-quarter earnings before interest, taxes, depreciation and amortization.
Store closures and reduction in inventory are expected, according to the company, to reduce peak inventory in 2012 by $500 million to-$580 million. It further expects to record a noncash charge of $1.6-$1.8 billion in the fourth quarter, related to a valuation allowance on certain deferred tax assets.