Sears Marches Toward a Delisting

Sears Holdings Corp (Nasdaq: SHLD) announced on Thursday that it will be making yet another round of store closings as it continues its uphill battle to demonstrate a path to long-term viability. Unfortunately, the plan for a leaner, more efficient Sears hasn’t worked up to this point, and analysts see little reason to suspect closing more stores will change Sears’ fate.

After announcing 100 store closures in January and another 100 closures in May, Searssaid on Thursday that it will close 46 additional Sears and Kmart stores in November. As of May, Sears said it was operating 894 total stores, down from more than 3,300 stores in 2006.

“We continue to evaluate our network of stores, which is a critical component to our integrated retail transformation, and will make further adjustments as needed,” Sears says in a statement.

Even after aggressively closing its least profitable stores and selling off assets, Sears’ same-store sales continue to drop precipitously. In the most recent quarter, Searsreported an 11.3 percent decline in same-store sales and a $424 million net loss. Sears has now racked up more than $11 billion in losses since 2012.

CEO Eddie Lampert has been keeping Sears afloat by using his hedge fund ESL to buy up $2.4 billion of Sears debt, but some analysts are questioning Lampert’s motives. “My conclusion is he’s trying to take the whole thing for himself,” Susquehanna analyst Bill Dreher says.

Dreher says Lampert is now well-positioned to acquire some or all of Sears’ prime assets in the event of a bankruptcy. In the meantime, Susquehanna estimates ESL will continue to earn more than $200 million per year in interest payments from Sears.

In June, Sears consolidated three large loans that were due this year and said it now has until July 20, 2020 to pay back the $593 million in debt.

SHLD stock is down another 67.6 percent year-to-date and is now dangerously close to the $1-per-share minimum listing price for stocks traded on the Nasdaq.

Dreher says Sears is simply overmatched at this point.

“The environment for Sears is…

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