After several months of hard work to bring our costs into line, we continue to take actions to realize our vision of an integrated retailer focused on quality member experiences. Changes in consumer behavior are driving our vision and actions, and we continue to transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members. Today, we will initiate the closing of an additional eight Sears and 35 Kmart unprofitable stores as we continue to focus on our best stores and return to profitability. This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current needs.
Having the right formats and right sized stores will help us put Sears Holdings in a better position to meet the realities of the changing retail world. In May 2016, we opened a smaller-format concept store in Fort Collins, Colorado, and we also recently opened another smaller-format store in Pharr, Texas. The smaller store concept allows us to focus on some of our stronger categories, complemented with our Shop Your Way membership program, home services and credit offerings. We expect to introduce additional smaller, specialized concept stores in the upcoming quarters while simultaneously reducing the number and/or the size of larger-format, less competitive stores.
We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs and, as a result, we had to absorb corresponding losses in the process. So, it is obvious that we don’t make decisions to close stores lightly. Our efforts have been, and will continue to be, fact-based, thoughtful and disciplined, with the goal of making Sears Holdings more relevant and more competitive for our members and other constituents.
As I have said before, the level of support we have from our vendors is an important factor in defining the size of our business and the number of stores we can operate responsibly going forward. We reached the point in the past 12 months where some of our vendors have reduced their support thereby placing additional pressure on our business. Despite this challenge, we have been working and fighting hard to improve our operational performance and streamline our organization.
We have made significant progress in our restructuring program since the beginning of the year and are well on track to achieve our $1.25 billion annualized cost savings target. We also continue to pursue a range of steps to improve our liquidity and reduce our debt. In fact, today we announced an amendment to our existing second lien credit facility to provide up to an additional $500 million in borrowing capacity to Sears Holdings. We also closed on the sale of over $200 million in real estate, which resulted in a pay down of a portion of our real estate loan as well as to reduce the outstanding balance on our revolving credit facility. We expect additional real estate sales to pay down even more of our debt and to generate liquidity for the company.
I believe the changes we have made will begin to build more confidence in the future of Sears Holdings among our vendors so that they will increase their support and put us on a more level playing field with our competitors. While there is still work to do, we are determined to do what is necessary to remain a competitive retailer in a challenging environment.
We remain highly focused on our two most important objectives – transforming Sears Holdings into an integrated retailer that provides superior value to our members and returning our company to profitability. We have a broad range of assets at Sears Holdings, with tens of millions of active members in our Shop Your Way program and its rapidly expanding partnership network; powerful, trusted brands such as Kenmore, Craftsman and DieHard; our leading Sears Home Services and Sears Auto Centers businesses; a substantial real estate portfolio; and more. We are making progress on our transformation and are committed to take further action to unlock value from our assets and realign our business model to build the integrated retailer of the future focused on delivering outstanding member experiences.
Eddie Lampert is Chairman and Chief Executive Officer at Sears Holdings Corporation.
Cautionary Statement Regarding Forward-Looking Statements: Certain statements contained in this post contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that use words and phrases such as the company “anticipates,” “believes,” “continue,” “expects,” “intends,” “plans,” “transform,” “going to be” and similar expressions or future or conditional verbs such as “will,” “may,” and “could” are generally forward-looking in nature and not historical facts and are intended to identify forward-looking statements. Forward-looking statements are subject to various risks, assumptions and uncertainties, including risks, uncertainties and factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.
Note: The blog post was updated to reflect the announcement issued by Sears Holdings the afternoon of July 7, 2017.