Sears closing McHenry store

McHENRY – McHenry County felt the first sting of closures announced by Sears Holding Corp. on Thursday when the company announced it would close the Sears Grand store in McHenry at 1900 Richmond Road.

A spokeswoman for Sears Holding said the store was expected to begin a liquidation sale in mid-March, with the final closure taking place by the end of May.

The store employs about 80 workers, and those employees will be notified of openings at area Kmart and Sears locations as the closure process wraps up, Sears Holding Communications Director Kimberly Freely said.

Those employees will have to apply for those positions, she said, and those who qualify will receive severance.

Sears Holding announced in December that it would close 100 to 120 stores, and 95 of those closures now have been announced. Of the 16 new closures announced Thursday, five were in Illinois, including a Sears in Alton and Kmart stores in Oak Lawn, Peru, and Zion.

“We’ll continue to evaluate the portfolio and makes decisions where appropriate,” Freely said.

The announcement came as Sears Holdings declared major losses in fourth-quarter earnings Thursday. As part of its turnaround plan, the company said it would spin off its Sears Outlet and Hometown stores, as well as some Sears Hardware stores.

The county has two Sears Outlet stores, in McHenry and Woodstock. It also has Sears locations in Crystal Lake and Spring Hill Mall, as well as a Kmart in Crystal Lake, that all remain open.

In addition, the company sold 11 properties to Chicago-based General Growth Properties for $270 million. Among those is a Sears in Champaign.

“We’re executing actions to unlock the value of our portfolio and assets,” CEO Lou D’Ambrosio said in a call with analysts.

Investors have speculated that the troubled retailer could sell off its massive real estate holdings to generate extra cash. But industry watchers say that will do little to solve Sears’ main problem: Rivals have been able to lure customers away from the chain because of its drab stores and unexciting merchandise.

“The image is atrocious. The stores are old and they’re run down. They don’t look like a nice place to visit,” said Ron Friedman, a partner in the retail and consumer products industry group of accounting firm Marcum, LLP in New York. “I don’t think that the Sears we see today can be around from a year today. It has to change.”

In its earnings report, Sears said it swung to a loss in the fourth quarter, with adjusted earnings totaling 54 cents a share, well below analyst expectations of 76 cents a share. Revenue fell 4 percent to $12.48 billion from $13 billion last year. Analysts expected $12.44 billion.

D’Ambrosio emphasized that it was important to distinguish between the retailer’s short-term operating performance and its balance sheet or liquidity. The company does have cash.

He also said that he and the board are “wide open for good ideas” for investing in the stores. But D’Ambrosio said that how much Sears invests in capital expenditures doesn’t tell the whole story.

One should look at what Sears is doing to make the overall shopping experience better, he said.

In fact, D’Ambrosio said the last year, Sears invested several hundred million in making the customer experience better.

Among the things the company has done: roll out close to 15,000 iPad and ITouch devices to stores so that sales staff can research products and can help customers check out.

The company also is working on better displaying merchandise, including pairing up headphones with teen clothes. Consumers will also see a new lineup of more high-tech washing machines and other appliances, he said.

“Looking at just [capital expenditures] belies our investment in the customer experience,” he said. “We are going to win our game.”

• The Associated Press contributed to this report.