Sears Holdings Acquires Additional Sears Canada Shares and Provides Financial Update

Sears Holdings Corporation ("Holdings," "we," "us," "our" or the "Company") (NASDAQ: SHLD) today announced that we entered into agreements to purchase or cause a wholly-owned subsidiary to purchase a total of 18,660,880 common shares of Sears Canada Inc. at a price of C$30.00 per share from Pershing Square, L.P., Pershing Square II, L.P. and Pershing Square International, Ltd. The acquisition is scheduled to close on April 27, 2010. The common shares to be acquired represent approximately 17.3% of the outstanding shares of Sears Canada. As a result of these agreements, we beneficially own an additional 18,660,880 common shares and now beneficially own 97,341,670 common shares, representing approximately 90.4% of the outstanding shares of Sears Canada. The purchases are being made as we consider them to be an attractive investment.

The purchases are being made in compliance with the private agreement exemption contained in section 100.1(1) of the Securities Act (Ontario) and section 4.2 of Multilateral Instrument 62-104, as the price does not exceed the maximum amount payable under such exemption and the purchases are being made from not more than five vendors.

In connection with this transaction, we are also providing the following financial update.

Comparable Store Sales and Earnings Outlook

For the quarter-to-date ("QTD") period through April 21, 2010 comparable store sales for our Kmart and Sears stores were as follows:

           Kmart                                    +3.2%
           Sears Domestic                           +0.3%
           Total                                    +1.7%

Kmart's QTD comparable store sales benefited from increases in apparel, home and toys categories. Sears Domestic's comparable store sales reflect increased sales of home appliances which benefited from the launch of new Kenmore products and a federally funded stimulus program to encourage customers to replace less energy efficient appliance products, offset by lower sales in the tools and home electronics categories.

We currently expect net income attributable to Holdings' shareholders for the quarter ending May 1, 2010 will be between $0 and $35 million, or between $0.00 and $0.31 per diluted share. In the first quarter of the prior year, we reported net income attributable to Holdings' shareholders of $26 million, or $0.21 per diluted share.

Financial Position

We currently expect to end the quarter with approximately $1.8 billion in cash balances (of which approximately $500 million will be domestic and $1.3 billion will be Sears Canada).

Short-term borrowings (consisting of commercial paper and borrowings under our revolving credit facility) are expected to be approximately $500 million at May 1, 2010, up from our year-end balance of $325 million but below last year's first quarter balance of $839 million. The expected short-term borrowings exclude the effects of the $560 million purchase of Sears Canada shares noted above.

During the first quarter through April 22, 2010, we repurchased approximately 12,000 common shares at a total cost of $1 million (or $88.76 per share) under our share repurchase program. As of April 23, 2010, we had remaining authorization to repurchase $581 million of common shares under the previously approved programs.

Adjusted EBITDA

The Company expects to report total Adjusted EBITDA (consisting of Kmart, Sears Domestic and Sears Canada segments) of $290 to $350 million in the current quarter as compared to Adjusted EBITDA of $359 million in the prior year quarter. During the quarter we incurred an incremental $40 million of expenses building our multi-channel capabilities and Shop Your Way Rewards program. The current year expected Adjusted EBITDA range contemplates:

  --  expected operating income of $85 to $130 million;
  --  plus expected depreciation expense of $215 to $230 million;
  --  less gains on sales of assets of $42 million;
  --  plus expected domestic pension expense of $26 million;
  --  plus expected closed store / severance costs of $6 million.

For further discussion of the reconciling items, see the Company's press release on fourth quarter 2009 results issued on February 23, 2010.

We plan to release financial results for our first quarter of fiscal 2010 on or before May 20, 2010.

Forward-Looking Statements

Results are preliminary and unaudited. This press release contains forward-looking statements about our expectations for the first quarter of fiscal 2010. Forward-looking statements are subject to risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: our ability to offer merchandise and services that our customers want, including our proprietary brand products; our ability to successfully implement initiatives to improve inventory management and other capabilities; competitive conditions in the retail and related services industries; worldwide economic conditions and business uncertainty, the availability of consumer and commercial credit, changes in consumer confidence, tastes, preferences and spending, and changes in vendor relationships; the impact of seasonal buying patterns, including seasonal fluctuations due to weather conditions, which are difficult to forecast with certainty; our dependence on sources outside the United States for significant amounts of our merchandise; our extensive reliance on computer systems to process transactions, summarize results and manage our business; our reliance on third parties to provide us with services in connection with the administration of certain aspects of our business; impairment charges for goodwill and intangible assets or fixed-asset impairment for long-lived assets; our ability to attract, motivate and retain key executives and other associates; the outcome of pending and/or future legal proceedings, including product liability claims, including proceedings with respect to which the parties have reached a preliminary settlement; and the timing and amount of required pension plan funding. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available.

About Sears Holdings Corporation

Sears Holdings Corporation is the nation's fourth largest broadline retailer with approximately 3,900 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance. Sears Holdings is the 2010 ENERGY STARĀ® Retail Partner of the Year. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. We are the nation's largest provider of home services, with more than 12 million service calls made annually. Sears Holdings Corporation operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. For more information, visit Sears Holdings' website at

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