Consolidation and optimization are two words that will be used quite often in 2016 for Sears Holdings Corp. as it attempts to stem the tide of negative EBITDA. And one of the key pillars of hope for Sears is its Shop Your Way loyalty program.

While Sears had delivered year-over-year EBITDA improvement in each of the previous consecutive four quarters, in the fourth quarter of 2015 it incurred an EBITDA decrease of $207 million versus the same period in 2014.

Rob Schriesheim, Executive Vice President and Chief Financial Officer, referenced the impact of the Shop Your Way loyalty program during the Feb. 26 fiscal fourth-quarter conference call.

“For fiscal 2016, our focus will be on generating positive EBITDA,” he explained, according to Seeking Alpha. “We intend to take more aggressive actions as we transition to an asset light, member-centric integrated retailer, leveraging our Shop Your Way program and eliminating operating losses while continuing to meet all of our financial obligations. More specifically, we intend to aggressively evaluate our store space and productivity to best meet our members’ needs. As part of this initiative, we intend to accelerate the closing of unprofitable stores, including the roughly 50 stores we announced last month.”

What’s more, Schriesheim said Sears would evaluate and optimize its cost structure, focusing on store level marketing expenditures and staffing levels and taking actions to reduce fixed costs and improve inventory management.

Further cost reductions are planned, $550 million and $650 million, depending on sales volume, on top of reducing expenses by $783 million in 2015 and $1.4 billion since 2012. Sears also plans to target at least $300 million of asset sales during the first half of the 2016 fiscal year.

“We do not intend to borrow money to fund continued operating losses, but rather to provide us with flexibility as we transition to an asset light, member-centric integrated retailer, leveraging our Shop Your Way program,” he explained. “As part of this transformation, we intend to optimize the value of our assets and to take actions that will generate positive EBITDA in the near future. Second, we continue to have financial flexibility to fund our transformation while meeting all of our financial obligations. We continue to have a rich portfolio of businesses and assets, including a substantial amount of unencumbered owned real estate as well as a large and valuable below market leased portfolio.

The successful Shop Your Way loyalty program has seen member sales penetration increase from 58% to 74% over the past four years.

“Going forward, we intend to increase our level of member engagement, while focusing on our best members, our best stores, and our best categories,” Schriesheim said.

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