Sears Holdings (NASDAQ: SHLD) on Thursday announced another round of store closures as it reported worse-than-expected first-quarter earnings, where same-store sales tumbled nearly 12%
Sears shares declined 31 cents, or 9.5% on the news to $2.90, in early Thursday trading. The stock has tumbled more than 50% from a year ago.
Looking for cash to cover its looming debts, the department store chain is currently in the midst of evaluating an offer from its CEO Eddie Lampert's hedge fund, ESL Investments, where the company would sell certain assets — including the Kenmore brand.
Lampert said in a statement Thursday that the company will continue "exploring third-party partnerships involving several of our businesses — such as Sears Home Services, Innovel, Kenmore and DieHard" to try to get back to profitability.
The department store sector as a whole, which includes rivals J.C. Penney (NYSE: JCP), Macy's (NYSE: M) and Dillard's (NYSE: DDS), has struggled to keep pace with the growth of Amazon (NASDAQ: AMZN) and other online players.
Their stores lack unique offerings that keep shoppers coming back for more, and their large presence in U.S. malls has been a burden as foot traffic drifts to more urban venues.
Sears ended the first quarter with $466 million in its cash reserves, compared with $336 million in the prior period. It has used roughly $994 million of a $1.5-billion revolving credit facility due in 2020.
Some industry experts speculate a bankruptcy protection filing could be near for Sears, especially in light of the department store chain looking to shed some of its more profitable and remaining assets.
