Sears may separate Lands' End, Auto Center as sales slide
(Reuters) - Sears Holdings Corp (SHLD.O: Quote) is considering splitting off its Lands' End clothing and Sears Auto Center businesses, after another quarter of declining same-store sales.
The company's shares rose 7 percent, as investors assessed the latest attempt by the operator of Sears department stores and the Kmart discount chain to turn around its business.
Analysts said recent moves to dispose of assets, while perhaps negative in the long term, could reassure creditors and vendors and help to ensure sufficient liquidity for now.
Sears has been suffering from declining sales since 2005, when hedge fund titan Edward Lampert merged the two iconic chains in an $11 billion deal.
Sears, still controlled by Lampert, said on Tuesday that same-store sales for the 12 weeks ended October 26 fell 3.7 percent.
The company said it now expected a net loss of between $532 million and $582 million for the third quarter ending November 2, wider than the $498 million loss reported a year earlier.
The company will release its results around November 21.
Battling intense competition from Target Corp (TGT.N: Quote), Wal-Mart (WMT.N: Quote) and Amazon Inc (AMZN.O: Quote), Sears launched last year a turnaround plan including shutting stores, selling real estate and shedding other assets.
Sears spun off its Orchard Supply Hardware Stores unit in December 2011. It announced plans in 2012 to spin off its Sears Hometown and Outlet businesses and certain hardware stores. Continued...