Analyst: There's 'No Reason' For Consumers To Shop At Sears

Shares of Sears Holdings Corp (NASDAQ: SHLD) have lost more than 36 percent since the start of 2016 and 70 percent over the past year as investors appear to be less confident in the company's outlook, especially since it may be forced to sell some of its business lines and assets.

News of an asset sale shouldn't come as a surprise to investors. Sears said so itself in its first quarter results. The company disclosed in its 10-Q filing that "we expect to pursue other near-term actions to improve liquidity" and "additional actions may include expense reductions as well as asset sales."

Related Link: Sears Discloses In Q1 Print It May Sell Assets To Improve Liquidity; Stock Jumps +8%

Sears did, however, add that the "timing and the overall amount will depend on a variety of factors."

The Time Is Now?

Matt McGinley, an analyst at Evercore ISI told Bloomberg Sears has been in a "desperate state for a number of years." He added that prior strategic actions implemented by Sears to improve its liquidity position has not been made "from a position of strength," rather it has been "done to fund substantial operating losses."

So why should this time be any different? Will a sale of its Kenmore appliance business, DieHard battery line or Craftsman tools bring shoppers back into the stores?

Short answer, according to McGinley: No. He suggested that while Sears' business is "leaner" and "meaner," there is "no reason" for consumers to walk through the door.

"They don't have any reason for being anymore," he also told Bloomberg.