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Sears to auction off its Castleton Square mall store to raise funds

April 12, 2018

Sears Holdings Corp. is selling off 16 of its Sears department stores—including the one at Castleton Square mall—but the retailer says the locations will remain open after the sale.

The Castleton location is one of three Indiana Sears stores included in the sale, along with stores in Mishawaka and Merrillville. The online auction site Real Insight Marketplace, which is conducting the sale, also lists for sale three stores in Ohio, one in Michigan, four in Missouri and five in Texas.

The Castleton property, built in 1972, includes 20 acres of land and 217,299 square feet of leasable space—a two-story department store that occupies 196,064 square feet, and a one-story service center that contains 21,235 square feet. Sears is an anchor at the mall, which is operated by Simon Property Group.

This is the latest round of real estate sell-offs for the financially struggling retailer, which has been shedding its assets as a way to generate cash.

Real estate services firm, which is teaming with Real Insight, told the Wall Street Journal that the stores being sold are profitable, and about 200 investor groups have expressed an interest in bidding.

“Over the last 18 months, the company has executed a series of real estate transactions where we sell owned stores and the stores go on leases, and continue their operation,” Sears spokesman Howard Riefs told IBJ in an e-mail.

The sales, Riefs said, are related to a previously announced November 2017 agreement between Sears and the Pension Benefit Guaranty Corp. 

Under that agreement Sears secured a $440 million loan, most of which the retailer will use to fund pension contributions for the next two years. Proceeds from the store sales will be used to repay “a substantial portion” of that loan, Sears said last month.

Bids on all of the Sears locations are due May 1, and the auction takes place May 22.

Sears, once the largest retailer in the United States, suffered 24 straight quarters of sales declines before ending the streak last period thanks to a gain attributed to new federal tax benefits.

As of the end of October, it operated 1,104 stores, down from 2,019 in 2012.

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