Shares in US department store Sears rocketed as markets opened today, after plans to reduce debts sent investors on a shopping spree.
The retail giant said its new strategy could remove $1.5bn from its debt and pensions obligations, which have weighed on the company’s stock market performance.
“We are initiating a fundamental restructuring of our operations. 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,” chief executive Edward Lambert said.
As well as acting as chairman and chief exec, Lambert is Sears’ biggest single investor and has been pursuing a strategy of selling assets to raise cash for the retailer. Lambert’s hedge fund, ESL Investments, is providing $500m in secured loans while the company undergoes a major transformation.
Read more: Losses mount at US department store Sears
"We significantly improved our operating performance and made progress toward profitability in the fourth quarter of 2016,” Lambert added.
“In the first several weeks of 2017, we undertook a series of transactions to optimise our capital structure and unlock value across our wide range of assets.”
Sears sold its iconic tool brand, Craftsman, to Stanley Black & Decker for around $900m (£720m) last month. The firm also unveiled plans to close 150 stores across the US. Offloading these will leave Sears with just under 1,500 units nationwide, down 60 per cent from 2011.
Established in 1886, the Nasdaq listed firm has struggled in the face of competition from e-commerce rivals.
"We believe the actions outlined today will reduce our overall cash funding requirements and ensure Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability,” Lambert said.