SHLDQ Sears Holdings Corporation (CE)

Sears Holdings Corp. Chief Executive Edward Lampert said he continues to explore options for the company's stable of familiar brands and close weaker stores but promised to keep running the Kmart chain.

In a blog post Monday, Mr. Lampert said the company is acting more aggressively to end years of losses by focusing on the company's best stores and closing unprofitable locations. That means the company will have a "smaller overall store footprint" but "there are no plans and there have never been any plans to close the Kmart format," he wrote.

Sears has announced plans to close more than 130 Kmart locations this year, but still operates more than 700 locations of the chain. Mr. Lampert said "a significant number of these stores are profitable." The company has also been selling off real estate to help fund its operations and in May announced plans to explore options for its Kenmore, Craftsman and DieHard brands.

Shares of the retailer, which have slumped in the past year, jumped 13% in Tuesday afternoon trading. Bloomberg News reported, citing sources, that bidders including Stanley Black & Decker Inc. and Techtronic Industries Co. had expressed interest in the Craftsman business. Sears declined to comment.

Mr. Lampert said in Monday's post that the company is looking to broaden the distribution and partnerships for the brands "that will allow them to grow beyond Sears Holdings," reiterating a statement the company made in May. The billionaire hedge-fund manager said the company's asset base "gives us the wherewithal to fund our business, but we don't intend to use our asset value to support loses."

Over the past five years, Sears Holdings has shut more than 400 Kmart discount stores and supercenters, or about a third of the chain's locations. In an unusual move, the retailer recently spent money to remodel and reopen a location in a Chicago suburb.

Sears Holdings booked a net loss of $866 million on sales of $11.06 billion in its six months ended July 30. The company ended the period with about $276 million in cash and long term debt of $3.4 billion, and said it would get $300 million in additional debt financing from Mr. Lampert's hedge fund.

Last month, Moody's downgraded its rating on Sears' speculative grade liquidity rating, noting the company will continue to rely on external financing and selling assets to fund its operating losses. Moody's estimated the company's operating cash flow will be negative $1.5 billion this year.

Mr. Lampert, who holds a controlling stake in Sears Holdings, said "the retail environment generally has been challenging" and "we won't be able to restore profit immediately" but Sears is focused on executing his restructuring plans.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com

(END) Dow Jones Newswires

October 04, 2016 14:05 ET (18:05 GMT)

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