Sears (SHLD) Sheds Profitable Assets in Bid to Firm Financials
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Generally, businesses aim to be profitable. But, Sears Holdings (Nasdaq: SHLD) might have another strategy.
The WSJ said on Tuesday night that Sears is selling off some of its prime locations in an effort to raise cash. Over the summer, the company sold about one dozen profitable locations in the U.S. and Canada. It should be noted that the company has 2,000 Sears and Kmart stores in the U.S. and 148 Sears in Canada.
One Credit Suisse analyst said at least two stores sold over the summer were generating EBITDA of $1.4 million to $3.1 million. Sears U.S. spokesman Howard Riefs said that those numbers are misleading and that most of the 300 Sears and Kmart locations the company has closed since 2010 were performing poorly. Less than 2 percent were good locations with good performance, he noted.
The Credit Suisse analyst came up with this estimates by averaging sales-per-square-foot at other locations and then discounting that by 30 percent to 40 percent. Operating margins were also estimated at 2.7 percent to 6.7 percent, depending on the location.
Sears shares are down 0.3 percent on Wednesday.
The WSJ said on Tuesday night that Sears is selling off some of its prime locations in an effort to raise cash. Over the summer, the company sold about one dozen profitable locations in the U.S. and Canada. It should be noted that the company has 2,000 Sears and Kmart stores in the U.S. and 148 Sears in Canada.
One Credit Suisse analyst said at least two stores sold over the summer were generating EBITDA of $1.4 million to $3.1 million. Sears U.S. spokesman Howard Riefs said that those numbers are misleading and that most of the 300 Sears and Kmart locations the company has closed since 2010 were performing poorly. Less than 2 percent were good locations with good performance, he noted.
The Credit Suisse analyst came up with this estimates by averaging sales-per-square-foot at other locations and then discounting that by 30 percent to 40 percent. Operating margins were also estimated at 2.7 percent to 6.7 percent, depending on the location.
Sears shares are down 0.3 percent on Wednesday.
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