But the bigger issue, analysts say, is that Sears hasn't invested in remodeling, leaving its stores uninviting.
Preschool teacher Sara Kriz concurred. Picking up conditioner at a Kmart in Manhattan on Tuesday, Kriz said she shops at Kmart "only when I have to," which amounts to once every few months. Yet she goes to Wal-Mart or Target nearly every week because, she said, they are cleaner and better stocked.
"It seems easier to go to Target and Wal-Mart to get the same thing at the same price," she said.
Sears Holdings announced Tuesday that revenue at stores open at least a year fell 5.2 percent for the quarter-to-date at both Sears and Kmart. That includes the critical holiday shopping period. Its Kmart stores reported a 4.4 percent decline, with layaway faltering as rivals like Wal-Mart and Toys R Us found success with their own layaway programs, which allow financially stressed shoppers to finance their holiday purchases by paying a little at a time.
Both Kmart and Sears stores reported weak consumer electronics sales. Sears, whose same-store revenue dropped 6 percent, also reported softer sales of home appliances. The same-store revenue metric is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Sears Holdings appeared to stumble early in the holiday season, as it opened its Sears, Roebuck and Co. stores at 4 a.m. on Black Friday, the day after Thanksgiving. Rivals including Best Buy Co., Wal-Mart and Toys R Us opened as early as Thanksgiving night. Sears stores had opened on Thanksgiving Day in 2010. Kmart has been opening on Thanksgiving for years.
A hint that trouble might be brewing came in mid-December when Sears Holdings unexpectedly announced that 260 of its Sears, Roebuck and Co. locations would stay open until midnight through Dec. 23.
In an internal memo Tuesday to employees, CEO and President Lou D'Ambrosio said that the retailer had not "generated the results we were seeking during the holiday."
Like Sozzi, Balter believes the shopping experience is hurting Sears' performance.
"The extent of the (sales) weakness may be larger than expected but the reasons behind it are not. It begins and some would argue ends with Sears' reluctance to invest in stores and service," Balter said.
Sears has yet to determine which stores will close but said it will post on http://www.
searsmedia.com when a final list is compiled. The company would not discuss how many, if any, jobs would be cut.
The company said that the store closings would generate $140 to $170 million in cash from inventory sales. It expects the sale or sublease of real estate holdings to add more cash.
The Hoffman Estates, Ill., company has more than 4,000 stores in the United States and Canada.
Its stock dropped 27 percent to $33.38.
Aside from the planned store closings, Sears is altering the way it handles stores that are not performing as well as others. The company says it will no longer prop up marginally performing stores in hopes of improving their performance and will now concentrate on cash-generating stores.
Sears Holdings said it also plans to lower its fixed costs by $100 million to $200 million and trim its 2012 peak domestic inventory by $300 million from 2011's $10.2 billion at the third quarter's end.