is considering unloading its troubled credit-card operating unit sent shares of the department store chain up more than 17% in premarket trading.
Sears said in a press release it is putting the unit, Sears Credit & Financial Products, on the block because it's hurting the valuation of the company's stock. The unit has seen steadily rising delinquencies and charge-offs, leading to a company debt downgrade and hampering what had been a promising turnaround campaign at the retailer.
The Wall Street Journal
reported Sears wants $6 billion to $7 billion for the operation and hired Goldman Sachs to find buyers. They might include any of the big credit card companies, including
Bank of America
In its release, Sears noted its credit card portfolio is the eighth-largest in the country and is "extremely attractive and very profitable."
"However, we believe the tremendous value and earnings power of these assets are not reflected in today's market valuation of Sears. By selecting the right strategic partner for this unique business, we believe we can create significant value for our investors," the company said.
Sears shares were up $3.60, or about 17%, to $25.05 on Instinet.