Why Sears Holdings Corp (NASDAQ:SHLD) Share Are Trading Higher?
- Author: Eleanor Harrison Feb 11, 2017,
Feb 11, 2017, 0:27
Sears plans on capitalizing on its real estate through in-store partnerships.
In addition, the retailer announced plans to reduce its outstanding debt and pension obligations of $1.5 billion for fiscal 2017.
In a bid to survive, Sears is taking a sledgehammer to its costs.
At time of writing this, Sears shares are trading higher by 39 percent.
Of course, he's been saying that for years with little improvement to show for it. Sears Holdings stock, about half of which is owned by Lampert, has been hit by concerns about the retailer's prospects amid chronic and deepening sales declines.
Sears Holdings (shld) allayed fears of an impending cash crunch amid ongoing cratering sales by announcing moves to cut costs by $1 billion, sending shares up 44% in premarket trading on Friday.
The company said it would accrue savings from the closure of 150 Sears and Kmart stores over the next couple months, among other actions.
It may also sell two of its brands - Kenmore appliances and DieHard vehicle batteries - after striking a deal last month to sell its popular tool brand Craftsman for $900 million to Stanley Black & Decker, which owns custom-storage product maker Stanley Vidmar in Allentown. Same store sales at Sears and Kmart for the first two months of its fourth-quarter have declined by 12-13%, although the company says it has "continued to manage inventory and costs closely" and its current quarter to date Adjusted EBITDA performance is "largely in line with a year ago, despite the sales declines".
Plans include at least $1B of annualized cost savings by reducing corporate overhead, more closely integrating Sears and Kmart operations, and improving merchandising, supply chain, and inventory management.
Sears Holdings revealed that it struck an amended asset-based credit facility.
Sears Chairman and CEO Edward Lampert noted these actions are expected to reduce its overall cash funding requirements. Wall Street analysts were already estimating the company's fourth quarter revenue to be $5.69 billion and $21.77 billion for the full year.