Sears Holdings described its wider loss in the second quarter as "unacceptable"

Sears Holdings described its wider loss in the second quarter as "unacceptable"

Sears Holdings Corp commenced its rights offering, through which it plans to raise up to US$380m by selling off the majority of its stake in Sears Canada to generate additional liquidity.

The US retailer is selling up to 40m shares in Sears Canada. Of the $380m expected to be generated from the sale, at least $168m will be received by mid-to-late October.

The rights offering will expire at 5pm New York City time, on 7 November, unless extended.

The move comes less than five months after it revealed it was exploring strategic alternatives for its Canadian business, including a possible sale.

In August, Sears Holdings described its wider loss in the second quarter as "unacceptable", adding that there would be more work to get the results it wants.

The retailer's net loss amounted to $581m during the 13 weeks to 2 August, from $127m last year, while revenues declined 10.1% to $8bn.

Shares in US department store group Sears Holdings tumbled nearly 17% earlier this week in response to reports that at least one "medium-sized" vendor had halted shipments to the retailer. 

The factoring transaction, which offers a lifeline to many apparel makers, is seeing a resurgence as a major source of capital for the industry, however. Click here to read just-style's analysis on factoring.