Sears Plans to Spin Off Specialty Stores

by Alyssa Oursler | August 13, 2012 9:07 am

Sears (NASDAQ:SHLD[1]), which also owns K-Mart, recently announced a spin-off[2] of its Hometown, Outlet and some hardware stores.

Sears first signaled the split was a possibility back in February, as it began looking for ways to be more profitable and appealing to shareholders. The department store, along with competitor J.C. Penney (NYSE:JCP[3]) has been struggling of late[4]. Department store Macy’s (NYSE:M[5]), on the other hand, has fared much better[6].

The spin-off is expected to raises somewhere between $400 million and $500 million.

Sears has a total of 1,238 Hometown, Outlet and hardware stores and has already closed more than ten of those stores.

Shares of the company were up nearly 9% in pre-market trading on the news. It is up more than 60% year-to-date thanks to a short squeeze[7], but is still in the red 15% for the last twelve months.

Endnotes:
  1. SHLD: http://studio-5.financialcontent.com/investplace/quote?Symbol=SHLD
  2. recently announced a spin-off: http://hosted.ap.org/dynamic/stories/U/US_SEARS_SPINOFF?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-13-08-02-06
  3. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  4. struggling of late: http://investorplace.com/2012/05/sears-jc-penney-jcp-shld-retail-stocks/
  5. M: http://studio-5.financialcontent.com/investplace/quote?Symbol=M
  6. has fared much better: http://investorplace.com/2012/08/macys-sets-high-bar-for-retail-earnings/
  7. thanks to a short squeeze: http://investorplace.com/2012/05/is-it-time-to-short-sears-holdings-shld-again/

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