December 28, 2018 10:24 PM
Sears plans to close its store at the Mall of America in March as part of an 80-store bankruptcy liquidation, according to a Sears Holdings release.
The department store operator told employees Thursday that it plans to shut another round of Kmart and Sears stores next year, in addition to those that are already going dark.
Sears announced that it expects to begin liquidation sales at the 80 stores in two weeks. The accompanying Sears Auto Centers will also be shut down, according to the release.
Minnesota stores closing include the three-level location at the Mall of America, which has been an anchor store at MOA since it opened in 1992, and a Kmart located at 201 Ninth Street South East in Rochester.
Also, the store on Rice Street in St. Paul is closing along with the Ridgedale Mall location.
University of St. Thomas Business Professor David Vang says leading the way in this change is online shopping.
"E-commerce is taking over and so a lot of the big box stores which were almost a ritual of shopping are now becoming public libraries where people go to try something on and then they order it online," Vang said.
He says buying habits have changed and it's very expensive to have such high square footage facilities and all their inventory locked up like that to have on display.
"It's a structural change that's going on in our economy," Vang said.
The 80 stores are due to close by March. That's in addition to 182 stores already slated for closure, including 142 by the end of 2108 and 40 by February. The company filed for Chapter 11 bankruptcy protection in October, saying at the time it would close more than 20 percent of all stores, keeping open only its 500 most profitable locations.
Sears Holdings Corp., which also runs Kmart, joins the list of retail brands taken over by hedge funds that collapsed under the weight of debt forced upon them.
Under hedge fund manager Eddie Lampert, Sears has bought time by spinning off stores and putting on the block the brands that had grown synonymous with the company, such as Craftsman. The company's chairman and biggest shareholder, Lampert loaned out his own money and put together deals to keep the company afloat and to turn whatever profit he could for ESL hedge fund. Lampert and ESL have been trying to buy the rest of Sears for up to $4.6 billion in cash and stock.
Shelley Keaton realizes times are changing. She said things won't be the same when Sears on Rice Street closes. Keaton says shopping Sears is like a family tradition.
"JC Penney's closing, Sears is closing, I mean where are the older people supposed to shop?" Keaton said.
No official bid appeared to have emerged as of 4 p.m. E.T. Friday. Sears declined to comment.
The Associated Press contributed to this story.
Tommy Wiita & Todd Wilson
Updated: December 28, 2018 10:24 PM
Created: December 28, 2018 03:01 PM
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