Two Kmart locations in Arkansas will be closing their doors later this year.
Sears Holdings Corp., which owns Kmart, confirmed stores in Springdale and Jonesboro are among those that will close by mid-December. Sears has not disclosed the full list, but The Associated Press cited a person familiar with the matter as saying 64 stores will be shuttered in the company's latest round of closings.
Sears spokesman Howard Riefs said the company was making a "difficult, but necessary decision" to close the Arkansas locations. Both Kmart stores will begin liquidation sales Thursday.
"We have been strategically and aggressively evaluating our store space and productivity, and are accelerating the closing of unprofitable stores as we have previously announced," Riefs said.
The company did not disclose the number of employees affected by the closures, but Riefs said eligible workers will receive severance and have the opportunity to apply for open positions at area Sears or Kmart stores that remain open. He added most of the workers are part time or hourly.
A manager at the Jonesboro store who declined to reveal her name when contacted Tuesday said the closure will affect more than 50 workers. A Springdale store employee declined to reveal how many employees at that store would be affected and referred all questions to the corporate office.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas' Walton Business College, said both Northwest Arkansas and Jonesboro have low unemployment numbers and good employment growth, which is "best possible situation" for the displaced workers. So the closings shouldn't have a big impact because there are other general-merchandise stores in the vicinity for customers to shop and workers to find jobs.
"As some business models work and some don't, as some businesses either modernize or don't, there will always be openings and closings," Deck said. "A vibrant economy can handle them."
The Arkansas closures are another indication of the ongoing struggles for Kmart and Sears Holdings, which is trying to cut costs after reporting a steady decline in sales and traffic in stores.
Sears Holdings reported a $395 million loss in net income during the second quarter. Revenue fell to $5.66 billion, which as an 8.8 percent drop from $6.2 billion during the same period a year ago. Same-store sales at Sears fell 7.1 percent and 3.3 percent at Kmart during the quarter.
The recent closures are in addition to an April announcement, when the company said it would close 68 Kmart and 10 Sears locations this year. In the previous round, Sears said it was shuttering one of its namesake stores in Little Rock.
The recent closings will leave Arkansas with Kmart stores in Little Rock, Russellville and Cabot.
"Kmart's issues go back a very long time and they seem to be on a slow path to irrelevance," Neil Stern, a senior partner at retail consulting firm McMillan Doolittle, said in an email. "While the company has carefully managed costs, years of declining traffic and sales is catching up to them."
Business on 09/21/2016