Given its desire to whittle $32 billion in debt down to $1.5 billion (net of cash reserves), Sears could certainly use the cash. Still, while the company can now focus exclusively on retail, credit cards had lately buttered its bread, making up 60% of operating income in fiscal 2002. Rising delinquencies and uncollectible accounts notwithstanding, the unit has helped Sears smooth out retail's inherent seasonality.
From here, all eyes are on Sears' flagging retail operations. Management says it wants it that way, despite 22 months of declining same-store sales and trends that favor discount competitors like Target
Sears, which is still working to integrate Lands' End merchandise into its stores, insists that a turnaround is under way. With investors now paying for a pure-play retailer, it better be.