Sears Canada Inc., the subsidiary of
Sears Holdings Corporation
), has agreed to sell its 50% joint venture (JV) interest in
eight properties to Montez Income Properties Corporation.
However, the JV partner, The Westcliff Group of Companies will
continue to own the remaining 50% ownership stake in the
properties and will be the exclusive manager. The transaction,
which is expected to close on Jan 8, 2014, will fetch nearly $350
The broadline retailer's subsidiary revealed that these stores
will continue to operate even after the deal's completion and
neither the staff nor customers will be affected. We believe the
company's latest move to be a strategic initiative toward
enhancing liquidity and improving operating performance.
Prior to this, on Oct 30, Sears Canada had announced the sale
of five stores that are leased to Cadillac Fairview Corporation
Limited for a total sum of C$400 million.
Sears Holdings has long been grappling with dismal top and
bottom-line performance. In an attempt to improve its financial
health, the company recently announced certain measures to
enhance growth prospects. These include the reduction of
investment in sections of the company that does not significantly
contribute to growth.
In this context, last month, Sears Holdings announced its
intention of spinning off the Lands' End and Sears Auto Center
businesses. The separation is expected to provide an additional
liquidity while focusing on its core business.
Further, Sears Holdings is focusing on cost containment,
inventory management and merchandise initiatives to inflate
margins. We commend the company's strategy of capitalizing on
opportunities, while increasing profitability through its
revamped organizational structure and new operating model. All
these measure will expectedly drive top and bottom-line
Other Stocks to Consider
Sears Holdings currently holds a Zacks Rank #3 (Hold). Other
stocks that are worth a look in the retail-discount space include
Big Lots Inc.
The TJX Companies, Inc.
). All of these have a Zacks Rank #2 (Buy).
BIG LOTS INC (BIG): Free Stock Analysis
PRICESMART INC (PSMT): Free Stock Analysis
SEARS HLDG CP (SHLD): Free Stock Analysis
TJX COS INC NEW (TJX): Free Stock Analysis
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