It's no secret that Sears Holdings' (NASDAQ: SHLD) has been busy closing under-performing Kmart stores around the country for years. However, feedback being received by analysts at Detwiler Fenton suggests the number of closings is likely going to rise and there's hearing increased angst and concern from suppliers.
The firm said feedback in the marketplace over the past few weeks suggested that a large number of stores had received "going out of business" packages from the company. This was seen as a surprise in many cases and included signage for the stores and instruction for promotional cadence to begin the process of clearing our inventories.
The analysst noted increased discussion about consolidation of Appliance inventories to certain store locations, with floor sample appliances at 50% discounts. They also noted significant promotion (up to 70% of Apparel and Home last weekend) and very early exposure to Holiday goods. They've been picking up a meaningful increase in order cancelations with some large suppliers, some suggesting that the reductions could foreshadow as many as 300 store closings.