Sears Holdings Details New Plan To 'Restore Profitability'

Sears Holdings Corp SHLD announced after Thursday's market close a new plan with the objective of returning to profitability.

Sears Holdings said that it will close 68 Kmart stores and 10 Sears stores throughout the summer. The company stated that the store closures should generate a meaningful level of cash from the liquidation of store inventory and from the sale or sublease of some of the related real estate holdings.

Shares of Sears surged higher by more than 6 percent during Thursday's after-hours trading session.

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Sears Holdings added that its store closure announcement, coupled with a $1.2 billion in debt financing that was raised earlier this month, should provide the necessary capital to "execute its transformation" and "restore profitability."

The decision to close stores was based on a comprehensive analysis of the sales performance of each store and the timing of lease expiration.

"The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability," said Edward S. Lampert, chairman and chief executive officer of Sears Holdings. "We're focusing on our best members, our best categories and our best stores as we work to accelerate our transformation."