Sears Holdings Corp. said sales continued to slide in its first
quarter though profitability improved, as the retailer prepares to
launch the offering for its real-estate investment trust spinoff
this week.
Shares of Sears, up about 24% this year, added 2.9% in premarket
trading.
Sears has moved recently to raise more than $2.5 billion by
selling about 235 of its top Sears and Kmart properties and leasing
them back through a new real-estate investment trust, Seritage
Growth Properties. Sears said Monday that it expects to be declared
effective by the Securities and Exchange Commission this week and
launch the offering Friday.
The retailer has also formed joint ventures with mall owners
including Simon Property Group Inc. and Macerich Co. All together,
Sears expects the moves to bring in more than $3 billion for the
company.
The moves have been seen as crucial to reassuring suppliers that
have been rattled by the company's long string of losses and are
seeking tougher payment terms to keep shipping their goods.
Meanwhile, sales continued to slide in its latest quarter.
Comparable stores fell 10.9%, led by a 14.5% decline at the
Sears Domestic unit and a 7% decline at Kmart stores.
Total revenue fell 25% to $5.88 billion. Sears said revenue was
hurt by last year's deconsolidation of Sears Canada, the separation
of Lands' End and fewer stores.
The company's gross margin, however, widened to 25.8% from 23.2%
in the prior-year period, helped by more efficient promotional and
marketing spending.
For the period ended May 2, Sears reported a loss of $303
million, or $2.85 a share, compared with a prior-year loss of $402
million, or $3.79 a share.
The quarter was helped by lower costs and expenses, which were
down to $6.1 billion from $8.3 billion a year ago.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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