Sears CEO’s Hedge Fund Seeks To Buy Kenmore For $400M

In a formal proposal, ESL Investments said it was seeking to purchase Sears Holdings’ Kenmore brand, as well as the retailer’s home improvement unit. ESL Investments is a hedge fund controlled by the chief executive of Sears Holdings, Eddie Lampert, Retail Dive reported.

The hedge fund is seeking to buy Kenmore for the price of $400 million, although the value could change at the time of a potential closing. In a filing with the U.S. Securities and Exchange commission (SEC), ESL Investments has been talking with partners that could be part of a deal. The hedge fund said that a purchase could happen based on “ESL’s receipt of equity financing from a potential partner on terms acceptable to it.”

In addition, ESL Investments’ proposal mentioned purchasing the retailer’s home improvement business for $70 million. The hedge fund is also reportedly thinking about a deal for the company’s Parts Direct business. However, its first focus is on a deal for the home improvement business and Kenmore.

The news comes as Sears was expecting to close an additional 72 stores as it grapples with falling sales. Those planned closures are in addition to the hundreds of brick-and-mortar locations the retailer has already shuttered, The Wall Street Journal reported in May.

The retailer faces competition from Amazon, Walmart and other retailers. In the latest quarter, the company’s sales declined once again, in line with recent trends: Merchandise sales fell more than 30 percent to $2.2 billion. The company has reported sales declines dating back to the third quarter of 2011. In addition, same-store sales declined by 13.4 percent. Store counts are down as well; the company has about 900 stores as of May 5. At the same time in 2017, the retailer had nearly 1,300 locations.

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: Sears said that it plans to shutter 103 stores in 2018.