Shares of Sears Holdings Corp (OTC:SHLDQ) were moving higher today after the department store chain said it would be initiating a formal process to sell a number of its assets including its Kenmore brand. The move came as speculation had built that Sears would have to sell more of its assets to fund its flagging retail business. As a result of the announcement, the stock was trading up 7.8% as of 11:02 a.m. EDT.
In addition to the Kenmore brand, Sears also said it intended to sell the Sears Home Improvement Products and the Parts Direct divisions of its Sears Home Services segment. The company has formed a special committee to explore a sale.
Sears CEO Eddie Lampert's hedge fund, ESL Investments, said it would be interested in being a purchaser of part or all of the assets for sale. ESL had previously offered $550 million for the above divisions of Sears Home Services.
Sears' announcement comes just a few days after the company said it would partner again with Amazon to do tire installations and balancing at its Auto Centers for tires purchased on Amazon. Investors applauded that move as well, but both that and today's news seem to be further signs of the underlying weakness in the company's retail business.
The retailer is losing hundreds of millions a year, and while the market cheers these asset sales as they temporarily shore up the balance sheet, such moves will do little to save the business in the long run.