NEW YORK (AP) — Rights to purchase shares of Sears Holdings Corp.'s new spinoff of its Hometown and Outlet stores rose in their debut Wednesday.
The option is listed on the Nasdaq under the "SHOSR" ticker symbol, and rose 22 percent, or 37 cents, to $2.06 in midday trading. The heavy trading suggests demand for stock of the new company, Sears Hometown & Outlet Stores Inc., which is expected to start trading under "SHOS" next month.
Sears Holdings Corp. had signaled that it would split the companies as a separate publicly traded entity back in February. There are 1,238 Hometown, Outlet and hardware stores as of April 28, according to Sears, which is trying to turn around its business and spruce up its image. It had already closed five Hometown stores, eight hardware stores and one Outlet store.
Sears, which also owns Kmart, has looked at spinoffs and real estate sales to restore profitability and boost shareholder confidence. Aside from the separation of the Hometown, Outlet and some hardware stores, the Hoffman Estates, Ill., company announced in May that it would spin off a stake in its Canada division.
Sears Chairman Edward Lampert's ESL Investments Inc. is expected to own a majority stake in Sears Hometown & Outlet Stores. For fiscal 2011, the combined Sears Hometown, hardware and Outlet businesses had net income of $33.1 million on revenue of about $2.34 billion. That compares with fiscal 2010 net income of $49.8 million on revenue of approximately $2.35 billion.