Sears closing its flagship downtown Chicago store in latest move to cut costs as company moves to rely more on online retail; store has lost 'millions of dollars' since opening in 2001, says Sears spokesman

Cindy Allen

CHICAGO , January 22, 2014 (Thomson Reuters Corp.) – Sears Holdings Corp is closing its downtown Chicago flagship outlet in April, the latest move by the retailer to cut the number of its stores as it relies more on online retailing.

The store has lost "millions of dollars" since opening in 2001, a Sears spokesman said on Tuesday. The closing will leave Sears' namesake chain without a store in the downtown core of its hometown. Sears is based in suburban Hoffman Estates, Illinois. It has three other stores in Chicago.

In a blog post on Tuesday, hedge fund manager Edward Lampert, who is Sears' CEO and top shareholder, said store closings are necessary because shoppers' habits are changing as they buy more online.

"The consensus about decreased store traffic also highlights another decision that has steered our work: we very often need less space to serve our members better and we may need fewer locations as well," Lampert said.

"As difficult as these changes are, we believe the alternative of failing to plan for or even see where the retail industry is heading would be far, far worse."

Sears reported a 9.2 percent decline in comparable sales for the holiday season at its namesake chain, the latest poor showing by the retailer. The company also operates the Kmart discount chain.

Sears Holdings has closed about 300 U.S. stores since 2010. The company has about 2,000 Sears and Kmart locations in the United States.

Other retailers are also closing stores. J.C. Penney Co Inc announced last week that it was closing 33 of its 1,100 stores. Macy's Inc is closing five stores, although it plans to open eight new locations.

The news of the Chicago store closing was first reported by Crain's.

(Reporting by Phil Wahba in New York. Editing by Andre Grenon)

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