The plan unveiled Friday thrilled investors, who drove Sears shares up 30% to $7.19 in early trading.
The latest restructuring plan does not include new closures of Sears or
The company estimated that its new measures would lower its debt and pension obligations by $1.5 billion and reduce annual costs by $1 billion.
The debt reduction includes a contribution from the recent sale of the company's Craftsman brand, which was worth about $900 million, while the cost reduction includes savings from the store closures.
To be sure, the company's sales performance remains dismal. Sales at stores open at least a year fell 10.3% in the fourth quarter, including an 8% reduction at Kmart and 12.5% at Sears.
And the company estimate that its fourth-quarter net loss would range from $535 million to $635 million, including a non-cash writedown of the value of the Sears brand name totaling $350 million to $450 million.
But the retailer's plan to "simplify" its corporate structure, "optimize produce assortment" and "drive efficiencies in pricing, sourcing, supply chain and inventory management" inspired confidence in investors.
"We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability," Sears CEO and investor
The future of Sears real estate is among the key questions. The company hinted that it would consider sales of more stores, saying it would "capitalize on valuable real estate" through in-store partnerships while it continues to "actively manage" its store portfolio "to identify additional opportunities for reconfiguration and reduction of capital obligations."
(© 2017 USA TODAY)