Deal lets Sears sell 140 locations
Same-store sales continue sharp decline
Ailing department-store chain Sears Holdings reached a deal that will allow it to sell up to 140 additional properties as it faces mounting losses and declining sales, likely setting the stage for another round of closures.
Sears said Wednesday that it had reached a deal with a U.S. government pension board to regain the right to sell the 140 locations that had previously been shielded from such a plan.
The company is expected to use all of the proceeds from the sales or financing deals — estimated at $407 million — to fund a pension plan that still supports about 100,000 beneficiaries.
Sears spokesman Howard Riefs declined to identify the locations included in the agreement, which comes after the company already had announced that more than 400 stores would close this year. He also declined to say whether any of the properties are already closed and whether the company could arrange deals that would allow it to lease the sites.
The retailer has been struggling mightily amid stiff competition with discounters, the rise of Amazon.com and nimbler rivals.
Sears stock tumbled 6 percent to $4.70 Wednesday.
The accord signed with the Pension Benefit Guaranty Corp. comes as the retailer continues to use its dwindling resources to keep the doors open, including selling brands and pledging assets as collateral.
Sears said Wednesday that it would post a third-quarter net loss of $525 million to $595 million, less than the $748 million it lost a year earlier.
Sales at stores open at least a year fell 15.3 percent. That included a 17 percent drop for Sears locations and a 13 percent decline for Kmart stores.
The company said its performance was slightly better when factoring out a reduction in the number of pharmacies and a decline in the amount of consumer electronics for sale at its stores.
The retailer also said Wednesday that it had reached its 2017 goal of slashing $1.25 billion in costs, which has included shuttering hundreds of stores.
“This agreement with the PBGC is another positive step forward which, upon closing, will provide our company with financial flexibility while supporting our commitment to honor our obligations to the associates and retirees covered by the pension plans,” Sears CEO Edward Lampert said in a statement.