Sears Looks To Spinoffs To Offset Sales Losses

While the sales numbers for Sears Holding Corp. continue to sink, the company is looking to spinoff ventures to right the ship.

Earlier this week, the retailer showed average losses of 10.6 percent — 13.9 percent for Sears brand stores in the U.S. and 6.9 percent for Kmart locations — for the second quarter. According to The Wall Street Journal, those numbers amount to a similar drop in the first quarter of 2015 but are notably worse than the same period last year, when sales dropped a comparatively meager 0.8 percent, with Kmart falling 1.7 percent and Sears stores actually seeing a 0.1 percent increase (newly opened and closed stores were excluded from that total).

The current second-quarter numbers led to a 10 percent decline in Sears’ stock price on Monday (Aug. 3), putting the company at a market value of $2.1 billion.

The retailer attests that its true worth, however, is not represented by its stock price, with Rob Schriesheim, Sears’ chief financial officer, having told the WSJ that spinoffs have created value for shareholders. In addition to divesting its Lands’ End business, a chain of Hometown and Outlet Stores and a stake in Sears Canada, Sears’ actions earlier this year — spinning off 235 properties into a new real estate investment trust called Seritage Growth Properties and forming new ventures with mall owners — resulted in a $3 billion profit, says the WSJ.

Sears also told the outlet that its moves outside the realm of in-store sales (which last year totaled $31 billion) will put the company back on track for profitability for the first time in three years. When all is said and done for the second quarter, Sears estimates that it will report gains in the range of $155 million to $205 million.



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