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Sears contemplates real estate sale

RBR Staff Writer Published 10 November 2014

In a major turnaround to avoid going into administration, Sears Holdings Corporation (SHLD) is contemplating raising cash through sale of its 200-300 prized real estate stores.


Sears CEO Eddie Lampert plans to sell the stores in 1,800-odd locations to a newly formed real-estate investment trust, which could generate $1.8-$1.9bn, according to Evercore ISI. The properties can then be leased back by the retailer.

Investors have welcomed the decision by Sears, which they say, has come very late.

The retailer has been struggling for a decade with nine straight quarterly losses. It has also exhausted many other avenues for raising cash.

In its efforts to turnaround, Lampert initially merged Sears Roebuck & Co. and Kmart Holding Corp. in 2005, spun off its Lands' End chain, and sold part of its Canadian operations.

But selling real estate could still leave Sears with a hefty annual rent bill, reports Bloomberg. The retailer plans to use the proceeds from the sale to fund its business.

Image: Sears department store at the Hawthorn Center in Vernon Hills, Illinois. Photo courtsey of Wikipedia