UPDATED 12/27/11 5:24 p.m.

HOFFMAN ESTATES, Ill. (CBS) — Hoffman Estates-based Sears Holdings Corp. is closing between 100 and 120 Sears and K-Mart stores nationwide, after abysmal holiday sales.

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.”

As CBS 2′s Dana Kozlov reports, news of the pending closings sent Sears stock tumbling 27 percent on Tuesday.

The list of stores has not yet been released, and it is not yet known whether any Chicago area stores will be affected.

The company said it will post on this Web site when a final list is compiled. Sears would not discuss how many, if any, jobs would be cut.

“We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate,” Sears said in a news release. “Further, we intend to optimize the space allocation based on category performance in certain stores.”

Morningstar equity analyst Paul Swinand said, “I don’t think it was totally a surprise. We had been getting a number of reports that appliance sales had been weak and Sears is the top seller of appliances in the United States.

Retail analysts might not have been surprised by Sears’ announcement, but state some lawmakers were.

News of the store closings comes just less than two weeks after Illinois lawmakers and the governor signed off on extending tax breaks designed to keep Sears’ corporate headquarters in Illinois.

Until earlier this month, the corporate tax rate in Illinois had been a major complaint for Sears. The company had been considering leaving Illinois, until Gov. Pat Quinn approved a multimillion dollar tax break for Sears and the CME Group, which was also considering departing the state.

Quinn said he was not given a heads-up about the closings before he signed off on tax breaks for Sears and he doesn’t know how many of the store closings will be in Illinois.

“I didn’t hear from them about that. I did hear from them about their intent to stay in Illinois, as far as their headquarters,” Quinn said.

The governor said the closures don’t affect the state’s $15 million-a-year in tax incentives to keep Sears headquarters in Hoffman Estates.

“The fact that they have to close some stores around the country, that isn’t good news, but it doesn’t directly affect this agreement,” Quinn said.

State Sen. Ira Silverstein (D-Chicago) said to learn of the store closures so soon after the General Assembly approved tax breaks for Sears is a kind of betrayal.

“We gave them a beautiful incentive package. They put a lot of pressure on us to do this package because they wanted to stay in Illinois and I think there’s some explaining that has to be done by Sears,” Silverstein said.

“When we give a package of incentives like this in trying to keep a corporation here in Illinois, they should at least tell us what they’re going to be doing in the near – not so much in the far future – but in the near future,” Silverstein added.

Asked how many closings would be acceptable, Silverstein said “none at all.”

LISTEN: WBBM Newsradio’s Nancy Harty reports

Silverstein said he wants Sears to explain when it knew it would close stores.

“When was this going to come down? When were they going to tell us? Was this decision made when we were negotiating this?” Silverstein said. “Those are questions unanswered and I feel kind of betrayed.”

In hindsight, Silverstein said perhaps the tax incentives should have included stipulations about keeping stores in Illinois open. He also intends to give more scrutiny to any future requests for tax breaks from Illinois corporations.

State Sen. Bill Brady (R-Bloomington) said retaining the corporate headquarters in Illinois and store closings are two separate issues.

He said effort would be better spent trying to figure out why businesses want to leave Illinois.

“We’ve got a great deal to offer, but the burdens of our workers’ compensation system and our tax structure need to be addressed immediately,” Brady said.

Sears spokeswoman Kimberly Freely said, “Under the legislation that was recently passed, if we don’t meet our obligations, we receive no benefits. We’re focused on improving our business and continuing to be a strong, contributing member of the Illinois business community.”

The declining sales at Kmart were blamed on diminished layaways and a drop in clothing and consumer electronics sales. Sears cited lackluster consumer electronics and home appliance sales for its poor sales.

Sears has more than 4,000 stores in the U.S. and Canada.