Sears Holdings Corp (NYSE: SHLD) shares continued to trade higher this week after the company announced that it is extending its Auto Center partnership with Amazon.com ( AMZN). Sears investors took the announcement as much-needed good news as the company continues to struggle to stay solvent.
SHLD stock, which dipped to new lows this month, was up more than 9 percent on Wednesday.
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On Tuesday, SHLD announced it is expanding the partnership with Amazon originally announced in May. The partnership allows Amazon customers to have tires purchased through Amazon installed at Sears Auto Centers. Amazon tire installation was initially available at only 42 Sears locations, but the service will soon be available at 118 locations.
To take advantage of the service, Amazon customers choose to have tires shipped to a local Sears Auto Center and select a convenient appointment time after completing their online tire purchase.
In a statement, Sears Automotive vice president and general manager Mike McCarthy says the Amazon partnership has been a big hit among customers.
“Amazon customer reviews have been very positive and we are two months ahead of schedule,” McCarthy said.
Unfortunately for Sears investors, it will take a lot more than an auto partnership with Amazon to save the troubled retailer. Despite aggressive cost-cutting initiatives, layoffs, asset sales and store closures, Sears reported a first-quarter net loss of $424 million and a 30 percent decline in revenue. Same-store sales dropped by 11.9 percent.
“Given the financials, this isn’t really a business that is worth saving,” GlobalRetail Data managing director Neil Saunders says. “Sears is very good with asset management, but they are not a sustainable business and have great difficulty managing the balance sheet.”
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Last week, the company announced it has consolidated $320 million in debt that was due in July and has gotten its due date bumped back by two years. Sears now has roughly $779 million in debt due in 2020.
SHLD stock is down 22.8 percent in the past month and 90.8 percent in the past three years.
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Sears Holding Corp (SHLD) Stock Continues to Rise, Thanks to Amazon originally appeared on usnews.com
