HOFFMAN ESTATES, Ill. – Sears’ first-quarter loss narrowed though sales continue to slide as the retailer prepares the roll-out of its real-estate investment trust this week to raise cash.
Sears Holdings Corp. said that it expects the real estate investment trust that it is forming, Seritage Growth Properties, will be declared effective by the Securities & Exchange Commission this week.
Sears is planning to sell and lease back about 235 properties, most of them Sears and Kmart stores, to the REIT. The company expects $2.6 billion in proceeds. The transaction also includes the purchase of interest in its joint ventures. The chain closed more than 200 Sears and Kmart stores in 2014.
In April Sears struck three real estate transactions, including getting $150 million from a joint venture with mall operator Macerich. It also has deals with General Growth Properties Inc. and Simon Property Group Inc.
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Sears is trying to extract value from its real estate holdings and replenish its cash as it tries to turn around its long-suffering business.
Sears’ stores experienced softness in consumer electronics, clothing, home appliances, lawn and garden and Sears Auto Centers. Kmart had weaker sales of consumer electronics, grocery and household, clothing and drugstore items.
The Hoffman Estates, Illinois, company – which runs Sears and Kmart stores – lost $303 million, or $2.85 per share. Losses, adjusted for one-time gains and costs, were $2 per share. That compares with a loss of $402 million, or $3.79 per share, a year earlier.
Selling and administrative expenses declined to $1.68 billion from $2.09 billion.
Revenue fell to $5.88 billion from $7.88 billion.
Sales at Sears domestic locations open at least a year dropped 14.5 percent, while sales at Kmart domestic locations open at least a year declined 7 percent.