This, photo shows a Sears store in Hialeah, Fla. Sears Holdings Corp. reported earnings on Thursday, May 25, 2017. Sears' extended decline in sales continued during the first quarter and the storied retailer vowed additional spending cuts to offset its slowing businessEarns-Sears Holdings, Hialeah, USA - 11 May 2017

Shares of Sears Holdings Corp. closed up 6.7 percent in trading Monday after the company said a special committee of the board will explore the sale of its Kenmore brand and other assets.

Shares closed at $3.65 cents.

However, at least one analyst — Susquehanna’s Bill Dreher — believes the move to a formal sale process means Sears is in deeper financial distress and is “closer to being forced to file for bankruptcy protection than we had previously suspected.”

He also noted that Sears has been shopping around its assets, but that the “price tags for their assets were considered astronomical by potential buyers, and as such very few bids were received.”

Sears declined comment.

The retailer said Monday that the formal process will explore the sale of Kenmore, the Sears Home Improvement Products business, as well as the Parts Direct component, of the Sears Home Services division. All are collectively referred to by Sears and the “sale assets.”

Sears said it has hired Centerview Partners as its investment banker, and that it would also “explore any other alternatives with respect to the sale assets that may maximize value for the company.”

The formation of the special committee and hiring of an investment banker is the follow-up to a letter proposal from ESL nearly a month ago stating that it would be a willing buyer. The committee, which consists of independent directors, will evaluate ESL’s proposal, and it can also solicit interest from other potential buyers.

The letter proposal from hedge fund ESL Investments was penned by ESL chairman and chief executive officer Edward S. Lampert. Lampert is also the ceo of Sears Holdings. And it was Lampert’s ESL that helped him fund his acquisition of Kmart Holding Corp. out of bankruptcy in 2003 after he gained control of a bond for under $1 billion. Kmart subsequently merged with Sears, Roebuck & Co. in an $11 billion deal in 2005.

In the letter, ESL made clear that Lampert would not be a participant in any discussions. Sears subsequently noted that Kunal S. Kamlani, president of ESL and a Sears board member since 2014, also would not be participating in any discussions to keep acquisition talks at “arms-length.” The ESL letter also sets forth other measures, such as a “go shop” process to allow for better offers.

Sears for nearly two years has tried to sell its sale assets, but hasn’t been able to reach an agreement with any potential buyers. And Lampert continues to plan for Sears to return to profitability, even if it means shedding more assets to enhance Sears’ liquidity.

He told shareholders at the company’s annual meeting last week: “We’re trying to eliminate stores. We need to get to the core. We need to get to where we can grow from. We need liquidity….This company needs to make money. It’s going to continue to shrink until it does.”

In a blog post last week before the annual meeting of shareholders, Lampert wrote: “The reality is transformation is an ongoing process and we are not done.” The Sears ceo also emphasized: “I’m invested in Sears Holdings — in every sense of the word.”

ESL’s nonbinding offer pegs the value of both Home Services components at $500 million, and it contemplates entering into an agreement with Sears so those businesses could continue operations following their acquisition. ESL also said it would be interested in acquiring certain real estate owned by Sears for $1.2 billion, with the understanding that Sears would enter into a master lease so “some or all” of the stores could continue operations. The Kenmore brand is an intellectual property asset.