Shares of Sears' new spinoff rise
NEW YORK (AP) — Shares of Sears Holdings Corp.'s new spinoff of its Hometown and Outlet stores rose in the new company's trading debut Wednesday.
Sears Holdings Corp. had signaled that it would split the companies as a separate publicly traded entity back in February. There are a total of 1,238 Hometown, Outlet and hardware stores as of April 28, according to Sears, which is trying to turn around its business and spruce up its image. It had already closed five Hometown stores, eight hardware stores and one Outlet store.
Sears, which also owns Kmart, has looked at spinoffs and real estate sales to restore profitability and boost shareholder confidence. Aside from the separation of the Hometown, Outlet and some hardware stores, the company announced in May that it would spin off a stake in its Canada division.
Sears Chairman Edward Lampert's ESL Investments Inc. owns a majority stake in the new entity called Sears Hometown & Outlet Stores Inc.
For fiscal 2011, the combined Sears Hometown, hardware and Outlet businesses had net income of $33.1 million on sales of about $2.34 billion. That compares with fiscal 2010 net income of $49.8 million on sales of approximately $2.35 billion.
The new company is listed on the Nasdaq under the "SHOSR" ticker symbol.
Shares of Sears Hometown & Outlet Stores Inc. rose more than 9 percent, or 15 cents, to $1.85 per share in late morning trading. Sears Holdings shares rose $1.51, or 2.7 percent, to $58.07.