Sears raising cash via rights offer and leasing deal with U.K. apparel retailer Primark

Hoffman Estates, Ill. --Sears Holding Corp. on Monday announced two moves to help it raise cash. The chain said it plans to raise up to $625 million through an offering of 8% senior notes and warrants as it works to boost liquidity and ease supplier concerns as it heads into the holiday selling season.Sears also announced an agreement to lease seven freestanding stores to Primark, a U.K.-based value apparel chain that had previously announced its intent to enter the United States.



Sears will share real estate space with Primark in six of the locations, with a streamlined store format of up to 100,000 selling square feet at each store.



"These lease agreements with Primark illustrate how Sears Holdings is strategically transforming one of the largest retail real estate portfolios in the United States over time while continuing to operate its existing stores in large, but rationalized selling space," said Jeff Stollenwerck, president of Real Estate for Sears Holdings.



Primark will lease from Sears Holdings a total of approximately 520,000 gross sq.ft. of retail space (approximately 400,000 net sq.ft. retail space) in mall-based stores located in the Northeastern United States. The space is expected to be delivered to Primark over the next 12 to 18 months.



Primark is expected to open the first of these stores at King of Prussia Mall in King of Prussia, Pa. Primark will join Dick's Sporting Goods as a subtenant of Sears. Primark will occupy over 100,000 gross sq.ft. on the lower level, while DICK's Sporting Goods currently occupies approximately 75,000 gross sq.ft. on the upper level. Sears will no longer operate a retail store or auto center at King of Prussia Mall, which is owned and operated by Simon Properties Group (SPG).



Another expected location is in Staten Island, N.Y. at the Staten Island Mall. This mall is owned and operated by General Growth Properties. At this location, Sears will continue to operate in approximately 70,000 selling sq.ft. adjacent to Primark. Primark will lease approximately 70,000 gross sq.ft. and will join Lands' End as a direct tenant of Sears. This Primark store will open in 2016.



The other five specific locations and projected store openings will be announced going forward.