Sears Struggles With Cash Drain

As the retailer continues divesting divisions and using cash flow to fund ongoing operating losses, it has fewer and fewer resources available to sell.

Sears is running out of ways to address its cash drain.

Even before Sears Holdings Corp. said this week it’s considering selling Sears Canada, the retailer had already been divesting real estate and pieces of its business such as Lands’ End to raise the cash it needs to fund operations. That’s left Sears, which faces operating losses of more than $1 billion a year for the foreseeable future, with fewer attractive assets left to sell to keep plugging the gap, according to International Strategy & Investment Group LLC.

‘‘Sure, there will be plenty of lookers, but I don’t think they’re going to get too many bidders,” McGinley of ISI said in a phone interview. “Given the issues Target has had, the appetite for a U.S. retailer like Macy’s to go into Canada is probably quite limited. My hunch is it’s unlikely they get a bid for Sears Canada and probably wind up spinning this out to shareholders.”

Jim Sluzewski, a spokesman for Cincinnati-based Macy’s, said the company doesn’t comment on speculation. Jen Johnson, a spokeswoman for Menomonee Falls, Wisconsin-based Kohl’s, didn’t respond to a phone call or e-mail seeking comment.

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