Sears Introduces Strategic Restructuring Program

Shares of Retail Company, Sears Holdings Corp. (NASDAQ: SHLD) opened over 37 percent after they said it would cut debt and pension obligations by at least $1.5 billion in 2017. Sears, in a statement, delivered meaningful improvement in operating performance for the fourth quarter of 2016, and outlined important actions to drive profitability. These include steps to enhance the Company’s liquidity and financial flexibility, as well as a strategic restructuring program intended to streamline operations, further improve operating performance and target cost reductions of at least $1.0 billion on an annualized basis.

Edward S. Lampert, Chairman and Chief Executive Officer of Sears Holdings, said, “We significantly improved our operating performance and made progress toward profitability in the fourth quarter of 2016. In the first several weeks of 2017, we undertook a series of transactions to optimize our capital structure and unlock value across our wide range of assets. We also reached an agreement to amend our asset-based credit facility which further enhances our liquidity and financial flexibility. Furthermore, we intend to use net proceeds from our announced Craftsman and real estate transactions, as well as from improvements in the operating performance of the Company, to meaningfully reduce our outstanding obligations and their associated expenses.

Next Phase of Transformation

Sears Holdings has initiated a restructuring program targeted to deliver at least $1.0 billion in annualized cost savings in 2017. These savings include cost reductions from the previously announced closure of 108 Kmart and 42 Sears’ stores.

Under the restructuring program, Sears intend to:

-Simplify Sears Holdings’ organizational structure, including greater consolidation of the Sears and Kmart corporate and support functions, as well as improve accountability for profitability at our store and online channels;

-Implement an integrated model to drive efficiencies in pricing, sourcing, supply chain and inventory management;

-Optimize product assortment at Sears and Kmart stores, using data analytics to better align with preferences of our Best Members focusing on profitable, high-return Best Categories; and

-Actively manage our real estate portfolio to identify additional opportunities for reconfiguration and reduction of capital obligations.

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