Sears begins exploring sale of Kenmore, other divisions

Sears. But after Sears failed to find a buyer for assets other than Craftsman, ESL told the company in a letter last month that it should “aggressively pursue divestiture” of all or some of those businesses.

ESL had also offered to buy certain Sears real estate assets, including debt, and continue to lease the properties to Sears or other entities.

Sears’ board has established a committee to evaluate ESL Investments’ proposal and seek other offers for Kenmore and the other divisions, the retailer said.

ESL previously said it would not purchase the businesses unless the deal was recommended by the committee and approved by a majority of disinterested shareholders. The investment firm also said Lampert and Kunal Kamlani, president of ESL and a member of Sears’ board, would not participate in sale discussions on behalf of Sears unless specifically asked to do so.

Sears has racked up more than $10.8 billion in losses over the past seven years, and any sales would give it a new source of funds as it works to restructure and slash costs. In the letter last month, ESL valued the Parts Direct and home improvement division at $500 million. It did not provide a valuation of the Kenmore brand but offered to submit a proposal.

If Sears does carve out any pieces of the business it’s considering selling, they won’t be the first. Since 2015, Sears has spun off the Lands’ End brand, sold Craftsman to Stanley Black & Decker, and sold 235 stores to real estate investment trust Seritage Growth Properties, in which Lampert holds a stake and serves as chairman of the board.

Transactions announced since the start of 2017 — including loans from ESL and its affiliates — added up to more than $1.8 billion in additional capital, according to a March report from Moody’s Investors Service.