Sears hasn’t yet completed its latest round of store closures, but it looks like the company is already planning for more to come.
In a pre-recorded conference call to discuss quarterly earnings on Thursday, Sears chief financial officer Jason Hollar said the company is looking for ways to generate “liquidity” — in other words, cash — and he specifically highlighted the company’s real estate.
“We have a valuable real estate portfolio, which at the end of the fourth quarter comprised 1,050 leases with significant optionality, as well as 380 owned stores, many in prominent locations,” Hollar said. “We will continue to assess opportunities to right-size our store footprint and inventory levels aligned to our ongoing transformation to an asset-light integrated retail model.”
By highlighting the leases with optionality, Hollar seems to be suggesting the point that Sears can find ways to either partially or entirely get out of those leases before they expire.
Meanwhile, the owned stores can be sold for cash.
Sears is under pressure from years of plunging sales, and investors have been supportive of the company’s decision to close its unprofitable stores. The company’s shares surged 14% on Friday.
Earlier this year, Sears announced it would close 150 Sears and Kmart stores by April. The company now has under 1,500 stores, which is down from 2,073 five years ago.
But finding buyers for Sears’ owned stores could prove challenging, following an onslaught of store closure announcements over the last several weeks.
Nearly 1,700 store closures have been announced since the start of the year by companies including Macy’s, JCPenney, hhGregg, Staples, and others.
With so many empty retail stores hitting the market, Sears will have a lot of competition for buyers.
Business Insider Emails & Alerts
Site highlights each day to your inbox.