Detwiler Fenton Sees Sears Positioning To Monetize Real Estate, Expects K-Mart Closure Increases

Shares of Sears Holdings Corp SHLD are seeing a nice bounce after locking below the $11 level for the past week amid Street talk about real estate monetization by the company.

Detwiler Fenton clarified based on its observation in a research note released in late September the company is apparently working on monetizing its real estate. Based on feedback, the firm said the number of K-Mart store closures is going to increase as Sears looks to rationalize its business and raise cash to keep the lights on.

Meanwhile, the firm said in its macro retail comments released on Thursday that Sears Holding's K-Mart continues to disrupt the market with store closings, driving volumes at low margins to clear out inventory.

In the September note, the firm had noted Sears Holdings was issuing directives to a large number of stores to clear back room inventories and shift them to stores. Suppliers saw the move as signaling closure of these stores in the future, portending a hit to future orders.

Related Link: How Desperate Is Sears?

The firm also highlighted the speculation doing the round that the company is seeking to consolidate appliance inventories to certain locations. Floor sample appliances were marked down by 50 percent and heavy promotions and early exposure to holiday goods all cemented expectations of increasing number of store closure.

Detwiler Fenton also indicated the possibility of Wal-Mart Stores, Inc. WMT being interested in K-Mart locations, where it can combine and renovate.

At time of writing, shares of Sears Holding were up 1.95 percent at $11.52.

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