Sears Holdings Corp (SHLD.O) said it would sell its Craftsman tools business to Stanley Black & Decker Inc (SWK.N) for $900 million, sending its shares up and taking some of the focus away from the company's dismal holiday season performance.
The sale, which ends a seven-month long search for a buyer, has been seen as a key step in the company's efforts to turn around its business.
Investors cheered the move, sending the stock up as much as 8 percent, even as the company reported a 12-13 percent drop in comparable sales during the holiday season.
Once the largest U.S. retailer, Sears has lost its standing as customers move to online shopping or rivals such as Wal-Mart Stores Inc (WMT.N) and has struggled with years of losses and declining sales.
Sears also said on Thursday it had set up a special committee to market real estate properties with the goal of raising more than $1 billion.
The company's weak holiday sales announcement comes a day after Macy's Inc (M.N) and Kohl's Corp (KSS.N) cut their 2016 profit forecasts, citing a bigger-than-expected drop in November and December sales.
Sears also said it would close 41 of its namesake stores and 109 Kmart stores which together generated about $1.2 billion in sales last year but ran up an adjusted loss of about $60 million before interest, taxes, depreciation, and amortization.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Ted Kerr and Saumyadeb Chakrabarty)