HOFFMAN ESTATES, Ill., June 13, 2017 /PRNewswire/ -- Sears Holdings Corporation ("Holdings," "we," "us," "our," or the "Company") (NASDAQ: SHLD) today announced important actions related to its previously disclosed strategic restructuring program, which is designed to deliver $1.25 billion in annualized cost reductions. These actions include the elimination of approximately 400 full-time positions at our corporate offices and support functions globally, in addition to certain positions at our field operations as well as the store closures we initiated last week. Combined with the restructuring actions announced since the beginning of the fiscal year, Sears Holdings has actioned nearly $1.0 billion in annualized cost savings to date and is on track to deliver $1.25 billion in annualized savings through actions taken in fiscal year 2017. The Company will continue to take all necessary action to drive improvements in our organization to achieve our profitability objective with a greater focus on Best Members, Best Categories and Best Stores.
"We are making progress with the fundamental restructuring of our operations that we initiated in February," said Edward S. Lampert, Chairman and Chief Executive Officer of Sears Holdings. "We remain focused on realigning our business model in an evolving and highly competitive retail environment. This requires us to optimize our store footprint and operate as a leaner and simpler organization."
As part of the Company's ongoing efforts to simplify its organizational structure and enabling greater consolidation of the Sears and Kmart corporate and support functions, approximately 400 full-time positions at our corporate offices and support functions will be eliminated. The majority of these positions are related to the corporate workforce at Sears Holdings' headquarters in Hoffman Estates. In addition, certain positions at our field operations will be impacted by these restructuring actions. While the total number of people who are directly affected represents a small fraction of our total headcount, we are conscious of the impact on individual employees. We are providing eligible associates severance compensation and transition assistance. As part of the organizational restructuring, the company first eliminated open positions and reduced contract employees in an effort to minimize the impact on full-time employees.
Transformation Progress to Date
Today's announcement is in addition to the significant actions the Company has already taken. Since the beginning of the calendar year 2017, we have taken decisive steps to improve our operational performance, enhance our financial flexibility and drive our strategic transformation, including:
- Significant progress on our strategic $1.25 billion restructuring program, with nearly $1.0 billion in annualized cost savings already actioned to date, including the actions announced today;
- Paydown of approximately $418 million of term loans outstanding under our revolving credit facility and extension of the maturity of $400 million of our $500 million 2016 Secured Loan Facility up to twelve months;
- Entered into an agreement with Metropolitan Life Insurance Company ("MLIC") to annuitize $515 million of pension liability to reduce the overall size of the Company's pension plan, future cost volatility and plan administrative expenses;
- Monetization of certain real estate properties that generated over $200 million in proceeds;
- Continued growth of our Shop Your Way ecosystem through strategic partnerships and value offerings, including recently announced partnerships with Citi and Time Inc.
We will continue to take all necessary action to drive improvements in our organization to achieve our profitability objective with a greater focus on Best Members, Best Categories, Best Stores strategy. Going forward, we will focus our investments to drive the growth of our valuable assets, such as our Shop Your Way platform; our Kenmore, Craftsman at Sears and DieHard brands; the nation's largest product repair services provider, Sears Home Services; and Sears Auto Centers, a leading provider of automotive maintenance and repair services and parts. In addition, we continue to evaluate strategic options across our portfolio to unlock value from our assets through partnerships, joint ventures or other means.
This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about our liquidity, our ability to achieve our cost-savings and profitability objectives, our ability to successfully achieve our plans to generate liquidity through monetization of our real estate, additional debt financing actions, asset securitizations or other potential transactions or otherwise, our intention to explore potential partnerships or other transactions involving our Kenmore and DieHard brands and our Sears Home Services and Sears Auto Centers businesses, the impact of the agreement with MLIC, and other statements that describe the Company's plans. Whenever used, words such as "will," "expect," and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company's control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Detailed descriptions of risks, uncertainties and factors relating to Sears Holdings are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.
About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members - wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way, a social shopping platform offering members rewards for shopping at Sears and Kmart, as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.
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