Sears Plunges on News of Store Closures

Billionaire Eddie Lampert's reputation as an investor continues to suffer as his failures at Sears Holdings SHLD pile up. On Tuesday, the retailer, where Lampert is Chairman of the Board, announced that it will be closing between 100 and 120 underperforming stores in an effort to boost cash flow. The move comes on the heels of a Tuesday announcement that same-store sales fell 5.2% so far in the current quarter, with sales at domestic Sears stores down 6%. In addition to problems at Sears-branded stores, the company is also seeing competitors to its Kmart discount stores take market share. Currently, SHLD has around 2,200 Kmart and Sears locations. "While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment," the company said. The retailer anticipates that the imminent store closures will generate between $140 million to $170 million in cash. "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," Chief Executive Lou D'Ambrosio said. Sears (SHLD) shares have fallen more than 22% to $35.67 on the news. Get realtime market updates and profitable trading ideas with Benzinga's news feed, Benzinga Pro, here.