Shares of the dying owner of Sears stores and Kmart exploded as much as 50% on Friday on news of a $1 billion restructuring. It also operates a hardware store at the Northampton Crossings shopping center on Route 248 in Lower Nazareth Township.
The company said it would accrue savings from the closure of 150 Sears and Kmart stores over the next couple months, among other actions.
The stock skyrocketed by about 30% during regular trading hours on Friday, but despite that, up-to-date data indicates that there's no short squeeze going on, or at least not yet anyway.
A Sears spokesman told Fortune that the latest restructuring could result in job cuts, but he could not specify how many. Sears said it would use proceeds from asset sales, improving profitability and working capital management to reduce its debt and pension obligations by $1.5 billion in fiscal 2017.The company had pension and post-retirement benefit liabilities of $2 billion and long-term debt of $3.7 billion as of October 29.Up to Thursday's close, Sears shares had fallen 63.7 percent in the past 12 months. Sears had about 178,000 employees in the US a year ago.
Sears Holdings forecasted a weak comparable-store sales fall by 10.3% during the quarter mainly impacted by a fall of 8.0% of Kmart and a 12.3% fall at Sears Domestic. That's better than the drop of 13.1 percent that Wall Street had expected, according to FactSet.
"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 chairman and CEO Eddie Lampert said in a statement. But the retail landscape has undergone seismic shifts since then.
Over the past few years, Lampert has taken many steps to raise cash and stave off collapse.
Sales have continued to be challenging for Sears during the quarter to date.
And old rivals have made it tougher.
Sears has ramped up online services, but it's having a hard time disguising its age.
Sears rose $1.64 to $7.18 in early trading.