Sears Holdings Corp
The operator of Sears department stores and the Kmart discount chain said it intends to separate its Sears Hometown and Outlet Businesses and certain hardware stores through a rights offering expected to raise $400 million to $500 million.
The rights will entitle holders to purchase shares in the combined Sears Hometown and Outlet Stores businesses and certain hardware stores and will be transferred to holders of Sears Holdings common stock.
Sears also said it had reached a deal to sell 11 stores to General Growth Properties Inc
The actions come at a time when business lenders such as CIT Group Inc
The actions of the asset sales and business separations of the outlets and hometown stores is management showing the Street that it can pull liquidity levers if it so chooses, Morningstar analyst Paul Swinand said.
Sales at the company have fallen every year since it was formed by hedge fund manager Edward Lampert in 2005 through the merger of two of the most iconic American chains in an $11 billion deal.
Sears reported a big quarterly net loss on Thursday after a poor showing during the holiday season. The net loss was $2.4 billion, or $22.47 a share, after a number of one-time charges, compared with a profit of $374 million, or $3.43 a share, a year earlier.
Excluding one-time items, Sears earned 54 cents a share.
Sales fell $518 million to $12.5 billion for the quarter, ended January 28. Sales at its U.S. stores open at least a year fell 3.4 percent, including a 4.1 percent decline at its namesake department stores and a 2.7 percent fall at Kmart.
On Wednesday, the company's Canadian unit, Sears Canada Inc
One of my big concerns is still Sears Canada, which was a jewel but is now looking like it's going south too, Swinand said.
(Reporting By Dhanya Skariachan; Editing by Gerald E. McCormick and John Wallace)