Sears' biggest shareholder offers to buy Kenmore brand

Eddie Lampert’s hedge fund Sears’ biggest shareholder has asked the struggling retailer to sell the Kenmore brand and its home improvement business

Sears Holdings Corp. and its board of directors have received a letter from ESL Investments expressing the view that the company should pursue a divestiture of all or a portion of its Kenmore brand and related assets, the Sears Home Improvement business of the Sears Home Services division (SHIP) and the PartsDirect business of the Sears Home Services division.

Lampert says Sears was unable to find other buyers for the units.

That sent shares of Sears Holding Corp., which have lost more than 70 percent of their value in the past year, up almost 5 percent.

If ESL gets what it wants - and it's hard to believe there be a lot of competition for anything but the Kenmore brand - the only thing left of Sears will be its name and some Kmart stores that probably have a short shelf life.

The news also comes just a little over a week after the retailer announced that it was closing its last store in Chicago following 93 years in operation and selling 16 of its properties in an online auction. ESL is the largest shareholder in Sears and one of its largest lenders. It will fund Sears with the necessary cash to avoid a bankruptcy filing that seems a possibility amid the continually declining business performance of the retailer. It also noted that it's "open to making an offer for Sears' real estate (including the assumption of the $1.2 billion of debt obligations secured by such real estate)". (AMZN) and from its own business blunders.

But some analysts have cautioned that selling off Sears' best brands could leave shoppers with fewer reasons to visit its stores. He took over as the CEO in 2013.

Shares of Sears, which have collapsed over the past five years, closed 7.6 percent higher at $3.24 on Nasdaq. Though the company continues to suffer mounting losses and declining sales, it is among the top brands for appliances.

"It looks to be a last-ditch effort to extract some value from Sears' very bare cupboard of remaining assets", said Ken Perkins, founder of retail research firm Retail Metrics.

On Monday, Sears confirmed the offer from ESL and stated that it is under review by a board committee for the necessary consideration.

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