Sears weighs selling some stores to investment trust to raise cash

Over the last year, Sears Holdings has moved to sell a variety of assets to help raise money, including the Lands’ End business and some of its ownership in its Canadian enterprise.

The struggling retailer has unveiled yet another unusual financial maneuver that it might employ: selling some of its stores to a new real estate investment trust.

Sears disclosed in a regulatory filing Friday that it was weighing selling 200 to 300 stores to a real estate investment trust, or REIT, and leasing back those sites. The new entity would receive financing to buy the stores both by giving Sears shareholders the right to buy stock in the investment trust and by taking on debt.

Once the country’s biggest retailer, Sears has steadily moved to shrink its troubled empire as sales at its eponymous stores and Kmart locations have tumbled.

Comparable sales for Sears domestic locations in the 39 weeks that ended Nov. 1 were roughly flat, while those at its Kmart stores were down 1.2 percent. The company estimates it could lose up to $630 million in the quarter that ended Nov. 1. But the disclosure about the potential formation of a REIT sent shares of Sears up 31 percent, to $42.81.

New York Times

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