An April 20 letter from Sears Holdings CEO Eddie Lampert’s hedge fund, ESL Investments, to the retailer’s board of directors urged divestment of the Sears Home Improvement and PartsDirect businesses as well as the Kenmore appliances brand.
ESL Investments offered to acquire Sears Home Improvement and PartsDirect for $500 million, and proposed submitting a bid for Kenmore and the retailer’s real estate. ESL expects to enter into a master lease for some or all of the divested stores to allow for their continued operation.
Sears already is selling 16 profitable stores on an online auction platform as sale and lease-back deals, with bids due by May 1. Some properties with agreements that allow modifications could be turned into self-storage, hotel or residential space.
The retailer expects to close 103 stores in 2018, including 64 Kmart stores and 39 Sears stores. The affected locations were expected to close between early March and April.
A sale of still-valuable assets would infuse cash into the long-struggling retailer, and is not without precedent: Sears sold its Craftsman brand to Black & Decker in January 2017 for $900 million.