On Thursday, Sears (SHLD) said that DICK’s Sporting Goods (DKS) would sublease retail space at a 215,000-square-foot Sears store located in Pennsylvania’s King of Prussia Mall.
Under the deal, the DICK’s outlet will operate in part of the the second level of the Sears store. Sears will control two external entrances to the store, while DICK’s will manage the second level mall entrance to the location.
A Sears executive said that the deal represented the “selective and strategic redeployment of our existing real estate base” to increase revenue and attract more customers to that area of the mall. Sears operates about 2,500 stores in the U.S. and Canada. More that 550 DICK’s stores can be found across 46 states.
Sears has struggled in recent years to turnaround declining sales. The company has reportedly been selling off some of its top-performing stores in order to raise cash.
Toronto’s Globe and Mail reported on Wednesday that Sears Canada plans to lay off more than 1,600 employees in an effort to slash costs. About 1,300 of the job cuts will come from its call center operations, which are to be outsourced to IBM (IBM).
Last year, the company that ran the portrait studios at Sears stores for decades shut down, leaving unoccupied space in many Sears locations.
Sears shares climbed more than 3% on news of the deal, while DKS stock tumbled more than 3% in Thursday morning trading.