* Estimates loss for holiday quarter
* To cut debt and pension obligations by at least $1.5 bln
* Shares rise as much as 40 pct
(Adds details, updates shares)
By Sruthi Ramakrishnan
Feb 10 Beleaguered retailer Sears Holdings Corp
said on Friday it would cut costs by $1 billion and
reduce debt and pension obligations by at least $1.5 billion
this year, sending its shares soaring as much as 40 percent.
The company also said it had sold five Sears full-line
stores and two Auto Centers for $72.5 million in January, and
had engaged Eastdil Secured to raise at least $1 billion from
the sale of its real estate.
Once the largest U.S. retailer, Sears has struggled with
years of losses and declining sales as shoppers shift online or
to rivals such as Wal-Mart Stores Inc.
On Friday, the company estimated its sixth straight
quarterly loss, with comparable store sales falling 10.3 percent
during the all-important holiday selling season.
Sears has spun off some of its stores into a real estate
investment trust, put some brands on sale and repeatedly raised
debt from billionaire Chief Executive Edward Lampert's hedge
fund as part of efforts to cope with the slump.
Under the latest plan, the company said it would consolidate
Sears and Kmart's corporate and support functions and improve
product assortment at its stores.
Some measures outlined on Friday, such as inventory
management, monetizing real estate assets and using data
generated from its Shop Your Way membership program to
understand customer preferences, have been part of previous
The company also reaffirmed that it would close 150 stores.
Sears did not specify if the latest cost-saving plan would
involve job cuts.
It was too early in the restructuring process to discuss
potential staff reductions, a source close to the company said.
Sears said it would use proceeds from asset sales, improving
profitability and working capital management to reduce its debt
and pension obligations by $1.5 billion in fiscal 2017.
The company had pension and post-retirement benefit
liabilities of $2 billion and long-term debt of $3.7 billion as
of Oct. 29.
Up to Thursday's close, Sears shares had fallen 63.7 percent
in the past 12 months. The broader S&P 500 retailing index
had risen 31 percent in the same period.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Anil
D'Silva and Sriraj Kalluvila)