Sears Holdings (NASDAQ:SHLD) is exploring strategic partnerships and the potential sale of its best-known brands: Kenmore, Craftsman and DieHard.
The retailer revealed this strategy during its quarterly earnings release as management vowed to continue funding its "transformation" as losses continue to mount.
The company reported a $471 million loss for the first quarter of 2016 compared to a net loss of $303 million for the prior year's first quarter.
Kmart and Sears domestic comparable store sales declined 5 percent and 7.1 percent respectively for the quarter.
"We continue to focus on improving the overall performance of these businesses through changes to our assortment, sourcing, pricing and inventory management practices," chairman and CEO Eddie Lampert said in a statement. "We remain focused on restoring Sears Holdings to profitability by concentrating on our best stores, our best members and our best categories through innovative solutions leveraging our Shop Your Way membership program and our Integrated Retail offerings."
Sales to SYW members have grown from 58 percent to 73 percent since 2011. "Going forward, we intend to increase our level of member engagement while focusing on our best members, our best stores and our best categories," said CFO Rob Schriesheim, on a pre-recorded conference call.
Sears has focused on growing the Shop Your Way membership program, but the effort has not yet paid off. The company has accelerated store closings and created a Real Estate Investment Trust.
And now it's looking to monetize its biggest brands.
"As we continue to evaluate opportunities to accelerate our transformation and drive growth, we recognize there is significant potential to further develop our Kenmore, Craftsman, DieHard and Sears Home Services businesses," said Schriesheim. "These iconic brands are beloved by the American consumer and we believe the recent performance of Sears and Kmart have impeded their ability to grow. These brands have substantial potential and we believe that exploring alternatives is the right approach to create long-term value."
Sears has slowly been spinning off divisions, including its Canadian operations, and monetizing assets by selling its real estate.
Schriesheim emphasized the company's belief that it has sufficient financial resources and liquid assets to fund a transformation and meet its financial obligations.
Schriesheim also said he will be stepping down to pursue other interests but will remain with Sears until a replacement has been found.
- see this Sears press release
- see this Sears conference call transcript
- see this CNN Money story
Sears CEO: Retail is struggling
Sears to accelerate store closings
Sears' sales plunge 20%