Sears to close Mall of America store in March

Sears announced Friday it plans to close its anchor location at the Mall of America in late March as part of an 80-store bankruptcy liquidation, signaling the end of an era in Minnesota for a store that once dominated the nation's retail landscape.

The company also said it will shutter the Kmart in Rochester, Minn.

The beleaguered department store operator told employees across the nation of its decision on Thursday and said liquidation sales would begin in about two weeks.

Sears Holding Co. filed for Chapter 11 bankruptcy Oct. 15 and has kept about 700 stores operating through the busy holiday shopping season.

Since filing for bankruptcy, the retailer has announced plans to close more than one-third of its Sears and Kmart stores.

The Mall of America store, a prominent three-level anchor location, was an original tenant when the Bloomington mall opened in 1992 and was the last remaining full-service Sears store in the state.

Sears previously announced that its store in downtown St. Paul near the State Capitol would close along with one at Ridgedale Mall in Minnetonka. The St. Paul store opened on Rice Street in 1963.

A leveraged buyout 10 years ago saddled the company with billions of dollars of debt just as the recession hit and online shopping began gaining steam for its ease and convenience.

Sears chairman and former chief executive Eddie Lampert, whose hedge fund is the retailer's largest investor, has spent recent years closing hundreds of stores and selling off assets to outrun looming debt payment deadlines.

The latest was Friday at 3 p.m. When no bidders emerged, the company was forced to liquidate some assets.

In a statement, Sears Holdings described the spate of closures as necessary "to accelerate its strategic transformation and facilitate its financial restructuring."

Last week, U.S. Bankruptcy Judge Robert Drain allowed Sears to sell its home-improvement service business to Service.com for $60 million. The company already has sold its Craftsman tools to Black & Decker.

Mall of America officials said in a statement that Sears' departure provides a chance to transform a "premier space."

"While change can be difficult," it said, "we are very excited for the future of our destination, as well as this specific opportunity at this world-class property."

The loss of Sears leaves the Mall of America with a massive 200,000-square-foot hole.

Bloomingdale's pulled out of its anchor spot in early 2012 after 20 years, and the mall has yet to fill the space entirely. At the time, the mall's owners said they planned to spend $30 million to $50 million on renovations and to convert a sublevel storage area into retail and restaurant space.

Crayola went into the top level in the summer of 2016. Outdoor retailer L.L. Bean moved into a portion of the first floor in 2014, joining specialty retailer Forever 21, which also occupies the lower level.

The fate of about 14 Sears Hometown stores in smaller cities around Minnesota is uncertain. Each is independently owned and sells mostly non-apparel goods.

Kmart stores in Minneapolis, St. Paul and International Falls were not included on the closure list provided by Sears Holding on Friday.

Jackie Crosby • 612-673-7335

Twitter: @JackieCrosby