Five Kmarts
Of the 142 stores Sears says it’s closing, 42 sit on property owned by Seritage. Just five Kmart stores earmarked for closing are part of Seritage’s portfolio.
Seritage shares lost less than 1 percent, to $42.82, at 10:42 a.m. in New York trading. They’re down 6 percent since the beginning of the year.
Three years ago, Lampert raised $2.5 billion for the chain by selling Seritage about 250 of Sears’s best properties for the retailer to lease back. Though the move attracted its share of controversy, it allowed Sears to turn a short-term profit even as revenue deteriorated. Seritage has gone on to be the one profitable part of the Sears constellation.
The REIT sits on a $1 billion liquidity cushion after Warren Buffett’s Berkshire Hathaway Inc. loaned it $2 billion earlier this year. Buffett personally owns a stake of more than 5 percent in Seritage, according to regulatory filings.
“Even if you imagine a really horrible scenario, it’s not a big issue for Berkshire,” said Richard Cook, a longtime Berkshire shareholder and fund manager in Birmingham, Alabama, who oversees about $360 million.
This article was provided by Bloomberg News.