Sears Is Closing Half of Its Stores -- but Seritage Need Not Worry

Hedge fund manager and longtime Sears Holdings chairman Eddie Lampert spent more than a decade trying to merge and then turn around the storied Sears and Kmart brands. Along the way, he raised billions of dollars of capital through asset sales and spinoffs -- most notably, the creation of retail REIT Seritage Growth Properties (NYSE: SRG). However, those efforts ended in failure, as Sears Holdings filed for bankruptcy protection a little over a year ago.

Despite this poor track record, Lampert's ESL Investments fund bought Sears and Kmart out of bankruptcy earlier this year, with plans to keep both chains alive in a slimmed-down format. Yet once again, Lampert overestimated the prospects of these dying retail brands. As a result, Sears and Kmart are poised to close the majority of their remaining stores between the last few months of 2019 and the first few months of 2020.

As part of the latest round of store closures, Sears and Kmart will close more than half of their Seritage-owned stores in February. However, Seritage has done so much work to redevelop its properties already that the pending store closures will have a negligible impact on the REIT.

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Source Fool.com