Sears Holdings Corp. shares soared 19.3% after the company announced a restructuring plan that aims to cut costs by $1 billion on an annualized basis and improve operating performance. Among the plans, Sears and Kmart corporate and support functions will be consolidated and data analytics will be used to optimize the product assortment at both Sears and Kmart. Sears plans to use the proceeds from the announced Craftsman and real estate transactions and operating performance improvements to reduce obligations and expenses, said Chief Executive Edward Lampert in a statement. And the company will continue to evaluate options, including partnerships and joint ventures, for the Kenmore and DieHard brands, as well as the Sears Home Services and Sears Auto Centers businesses. The company has initiated the 150 store closures it previously announced, with the expectation that they will be completed during the first quarter. And the company has partnered with Eastdil Secured to sell at least $1 billion in real estate properties. On Friday, the company entered into an agreement to amend its existing asset-based credit facility to provide a $140 million increase to the company’s available borrowing capacity, and the aggregate revolver commitments have been reduced to $1.5 billion from $1.971 billion. For the fourth quarter, Sears sees revenue of $6.1 billion, beating the FactSet consensus of $5.68 billion. Net loss is expected to range between $535 million and $635 million, and same-store sales fell 10.3%. Sears shares have fallen more than 63% over the past year while the S&P 500 index is up 24.6% for the same period.
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