Sears and Kmart has reported to close more than 120 stores as holiday season sales slump big time.

New York / NationalTurk – Sears Holdings Corp will shut down up to 120 stores in its Kmart and namesake chains, as Christmas season sales of consumer electronics so far are very poor. The struggling company stated to focus its energy on its better performing stores.

Sales at Sears Holdings, whose chairman and top shareholder is hedge fund manager Edward Lampert, have seen a sharp fall every year since it was formed through the merger of Sears and Kmart in 2005. In the eight weeks to Christmas Day, sales at Kmart fell 4.4% and by 6% at Sears.

American economy decline : Holiday sales slump

The company hit by the declining US economy, which has 2,200 outlets in the US, expects the closures to raise up to $170m (£108.5m; 130m euro) as their stock is sold off.

And so far this 2011 holiday season, the drop has continued. Same-store sales at Kmart were down 4.4 % in the current quarter through Christmas Day, and down 6 % at Sears’ U.S. stores. Companywide, they were down 5.2 %, the company announced on Tuesday.

Sears Holdings said the lower sales and margin pressure would lead to adjusted fourth-quarter earnings in 2011 before interest, debt and amortization of less than half of the year-ago quarter’s $933 million figure.

Sears declared that typically, it would keep “marginally performing” stores open to give them time to improve, but announced “we no longer believe that to be the appropriate action in this environment.”

Kmart and Sears C0 had had nearly 300o stores in North America

The store closings follow its announcement last quarter it would shutter 10 stores. Kmart and Sears have a combined 2,177 U.S. full service locations and another 500 in Canada.

Sears blamed poor consumer electronics sales in a tough economic environment “especially for big-ticket items” for more than half of the decline in its namesake chain’s domestic same-store sales. Both Sears and Kmart have experienced a decline in demand for consumer electronics, amid fears of another US recession, while Kmart has also reported a decline in clothing sales over the same period.

It even reported lower layaway sales, which are designed to allow lower income shoppers to pay for items in installments.

Last month, Sears reported a much wider than expected quarterly loss as higher markdowns and pricing pressures in appliances squeezed margins.

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