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Sears Holdings (SHLD) looking at possible sell-off of Sears Canada (T.SCC)

Gaalen Engen Gaalen Engen, Stockhouse.com
0 Comments| May 14, 2014


Sears Holdings (NASDAQ:SHLD, Stock Forum), the retail store operator in Canada and the United States responsible for Kmart, Sears Domestic and Sears Canada, has taken a beating in the market since mid 2010 when the firm's share value plummeted ~64% from $120 per share to $43.23 per share.

 

The company has been experiencing continual shrinking profits in the face of online competition such as Amazon and eBay and by August 2013, it reported a quarterly net loss of $194 million or $1.83 per share compared to a net loss of $132 million or $1.06 per share reported in the matching quarter of 2012.

 

Divestment and restructuring became the word of the day as it struggled to remain viable, one such move came today as Sears Canada (TSX:SCC, Stock Forum) formally recognized that Sears Holdings was looking to offer up its 51% controlling interest in Sears Canada and that the controlling parent company was even considering a complete sale of its Canadian arm.

 

Company CEO and director, Edward S. Lampert has his hands full patching holes in the floundering corporate ship as the company's market value slipped 22.31% in 2014 alone. Prospects for full recovery of the once powerful retail master and mail-order business giant as it continues to shed to survive are pretty dim.

 

Will this sizable divestment bring a sense of financial stablity to the beleaguered entity? If anything, the company's transition to a member-centric company may be the key as Shop Your Way members continue to grow as a key revenue component providing approximately 65% of the company's revenue.

 

Sears Holdings was in the news recently when the company announced it would release quarterly financial results on May 22, 2014.

 

Shares were up 2.29% on the news to $44.22 per share.

 

Currently there are 106.4m outstanding shares with a market cap of $4.7 billion.



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