Sears Holdings Corp. plans to sell 11 of its stores, including two in Utah, to General Growth Properties for $270 million.
General Growth said it anticipates that Sears will continue to occupy the stores into 2013, with final closing dates to be announced later this year.
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Sears, Kmart in Utah
Sears » Five full-service stores, two outlets and 11 specialty stores
Kmart » 15
Source: Sears Holdings spokeswoman
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The deal is expected to close in the second quarter of this year and will include the Sears stores at the Fashion Place Mall in Murray and at the Provo Towne Centre.
All of the stores that are part of the transaction are tenants in General Growth-owned properties.
General Growth spokesman David Keating described the purchase as a "strategic acquisition" for that real estate investment company that owns more than 130 shopping malls acorss the country.
He said General Growth is in talks with a number of national retailers that have expressed an interest in becoming tenants and taking over the soon-to-be vacant Sears locations. But he declined to name any of the interested retailers.
"Each of those locations provide us with a great opportunity," he said. "We’re still assessing those opportunities and how they would best fit at the respective centers."
Murray Mayor Dan Snarr said he was shocked to hear the Sears store in Fashion Place was being sold.
"But I do know that Sears has been struggling for a long time," he said. "So they are going to do what they have to do to remain viable."
Snarr added that he has a lot of confidence in General Growth’s commitment to Fashion Place. "I’ve seen the (performance) numbers of the mall for the final quarter of last year, and they were just phenomenal. And a lot of it had to do with the high-end tenants that General Growth has in there now."
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The mayor speculated that Dillard’s, which already is a Fashion Place tenant, may be interested in moving into the location being vacated by Sears.
"They (Dillard’s) have met with us off and on over the past four years about expanding at Fashion Place, and it could be that they now have their eye on that property," he said.
The Sears store at Fashion Place has 281,000 square feet. The Dillard’s store has 182,000 square feet.
Sears is hoping to raise as much as $770 million by selling the 11 stores and by taking additional steps to restructure its operations, steps that are expected to include spinning off the company’s Hometown and Outlet shops and some hardware stores into separately owned companies.
Those additional restructuring efforts are expected to generate as much as $400 million to $500 million for Sears.
In late December, Sears Holdings announced that it would close as many as 120 Sears and Kmart stores to generate as much as $170 million in cash from inventory and lease sales.
Sears on Thursday reported a fourth-quarter loss of $2.4 billion, or $22.63 a share, compared with net income of $374 million, or $3.43 a year earlier.
The loss was the largest quarterly decline for the company in at least nine years.
Sears Holdings spokeswoman Kimberly Freely said the decision to sell the 11 stores had nothing to do with their individual performances.
"The stores were sold because it just made good business sense for both Sears and General Growth," Freely said, declining to discuss any additional factors that went into the company’s decision-making.
Sears, a pillar of American retailing that began with a mail-order catalog in the 1880s, has numerous locations in Utah (including five full-service stores, two outlets and 11 specialty stores), according to Freely, and 3,560 nationwide. There are 15 Kmarts in the state.
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