In an email to FN, Sears confirmed the news of its store sales and leasebacks tied to the previously announced agreement with the Pension Benefit Guaranty Corporation, which was reiterated in the company’s fourth-quarter and full-year earnings reports.
“Over the last 18 months, the company has executed a series of real estate transactions where we sell owned stores and the stores go on leases and continue their operation,” said Howard Riefs, director of corporate communications.
What We Reported Earlier
Lights, camera, auction.
It’s showtime for Sears Holdings Corp. as the struggling company hits the digital stage to sell a number of its stores in Texas and the Midwest.
Commercial real estate firm Cushman & Wakefield and online bidding platform Real Insight Marketplace have launched an online auction to help the department store chain offload 16 of its properties under the Sears banner. Five of the stores are located in Texas, four in Missouri, three each in Indiana and Ohio and one in Michigan.
Some of the Sears establishments for sale are anchor tenants in malls and shopping centers, while others are freestanding stores. They range from one to three stories high, with the larger buildings spanning nearly 245,000 square feet. All property bids are due by May 1, according to Real Insight Marketplace.
For the full year reported in March, Sears Holdings saw a 24 percent drop in sales to $16.7 billion in 2017, from $22.1 billion in 2016. Same-store sales under the company’s Sears name declined more than 15 percent.
“We need to do more if we are to deliver on our commitment to return to profitability in 2018,” CEO and chairman Edward Lampert said in a statement addressing fourth-quarter and full-year revenues. “We will work to build on the progress we made in 2017, including ongoing actions to improve or close unprofitable stores and to unlock the value in our assets.”
For the quarter ended Feb. 3, the company reported that it had about 1,000 stores in the country, with 570 of those locations under the Sears banner. This year, the company announced that it would shutter 64 Kmart stores and 39 Sears stores — with the majority of the closings expected by April.
The online auction comes after an increasing number of retailers are ditching underperforming stores amid heightened digital competition. Anchor stores such as JCPenney and Macy’s have seen their traditional businesses take a significant hit — and both department store chains have moved to trim their brick-and-mortar locations and throw more investments behind digital.
In a bid to navigate its own challenges, Sears last year announced a strategy centered on the growth of small-format stores, opening several Sears Appliances outposts in states such as Texas with plans to branch out to similar concept stores that offer clothing and footwear products.
“These innovative smaller-format stores continue to showcase our company’s unique integrated retail capabilities by combining new technology, our strongest categories and in-store experts,” CFO Rob Riecker said in a conference call.
Sears has not responded to FN’s request for comment.
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