Last month, investor and CEO of Sears Holdings Corp., Eddie Lampert, said his hedge fund ESL Investments was interested in bidding on some of the retailer’s units. Sears has since announced the creation of a committee to look into the sale of its Kenmore brand, along with other assets. Shares of the retailer’s stock jumped on the news, rising by almost 20 percent, Reuters reported.
At the time, Lampert wanted the board to put those assets up for sale and said that ESL Investments was interested in such a sale. ESL offered $500 million for the retailer’s parts, direct and home improvement units, but had intended to put a bid for retailer’s real estate and Kenmore brand on hold. On Monday (May 14), the board created a committee of independent directors to weigh ESL’s bid and look for other offers.
Lampert wrote a letter to the board of Sears in April on behalf of ESL, explaining that the firm believed the sale could help Sears: “In our view, pursuing these divestitures now will demonstrate the value of Sears’ portfolio of assets, will provide an important source of liquidity to Sears and could avoid any deterioration in the value of such assets.”
Over the last several years, Sears has seen its sales tank and foot traffic evaporate. In January, the retailer announced that it raised another $100 million in financing and will be slashing $200 million in annualized costs through measures other than store closures. Stores will be closing, however, and Sears said it plans to shutter 103 stores in 2018.
“Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size,” the company said in a statement in January. “In the process, as previously announced, we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members.”