Dive Brief:

• The piecemeal sell-off of Sears Holdings' various assets continues. The department store retailer is working with Cushman & Wakefield and online auction platform Real Insight Marketplace to auction off some 16 store properties around the country.
• Real Insight is marketing the properties as potential repositioning and sale-leaseback opportunities for buyers. The stores — most of them in Texas, Missouri, Ohio and Indiana — range between 100,000 square feet and more than 240,000 square feet. Bids for the properties are due May 1.
• A managing director for Real Insight's owner, CWCapital, told the Wall Street Journal that the online auction process was "highly transparent for everyone, and levels the playing field." Cushman & Wakefield Managing Director Sean Hayes told the Journal that more than 200 groups had expressed interest in the property so far. A Sears spokesperson told Retail Dive in an email that the sale-leaseback stores in the auction — part of a series of real estate transactions over the past 18 months wherein the company has continued leasing and operating at the properties — are tied to an agreement with the Pension Benefit Guaranty Corp., which provided a new loan to Sears in March.

Dive Insight:

Sears' store properties — purchased decades ago, when it was fashionable for retailers to own their own real estate to control costs and determine their own fate — have been sold off in large and small chunks in recent years.

In 2015, Sears spun off hundreds of properties into a REIT that is chaired and partly owned by Sears CEO Eddie Lampert. The past and present property sales are part of a larger strategy to cash in on some of the retailer's most valuable assets to clot financial bleeding and, as Lampert and his team have pledged, return the company to profitability.

The company did indeed post a rare profit for the fourth quarter 2017, but that was accompanied by a terrible retail performance, marked by a drop in comparable sales of more than 15%.

As Fitch analysts pointed out in March, Sears' top-line sales fell by a quarter in 2017 as the company liquidated a huge chunk of its store base and lost an alarming amount of its customer base as well. According to Fitch analysts, Sears is poised for another 10% drop in comps this year, following an estimated negative drop in the mid-teens in 2017.

But, the analysts also noted, Sears has more owned property it could sell to free up liquidity — which is exactly what it's doing now through the auction — as well as business units it could sell, including the Kenmore and DieHard brands, Sears Home Services and Sears Auto Centers. Sears shocked the retail world last year with the sale of the popular Craftsman brand.

Sears recently also freed up some cash and reduced its maturities due this year through a distressed debt exchange in March that added to retail's overall first quarter default tally, which hit record highs, Moody's said this week. This week S&P analysts upgraded Sears' debt back to junk territory after summarily downgrading it to default levels following the company's debt exchange. The analysts noted Sears' operational progress but issued a negative outlook, pointing to the company's $134 million in maturities still due in October, as well as debt due next year.

At some point, Sears is going to run out of stores to close, property to sell, employees to layoff, units to divest and debt it can restructure or refinance. Simply put, the department store retailer needs to stem the loss in customers and sales if it's going to survive.