Clothing retailer The Limited officially closed all 250 of its stores on Friday, but as it noted in a statement on its website, "This isn't goodbye," because it is becoming an online-only retailer. It's a transformation that holds a potential solution to Sears Holdings' (NASDAQ: SHLD) ongoing financial woes.

Obviously Sears and The Limited are very different companies, as the latter has just a quarter of the number of stores the former boasts, plus a much more limited selection of merchandise. Yet there's nothing to prevent Sears (and its sister store Kmart) from becoming an internet retailer, and arguably, a lot to recommend such a change.

First, Chairman and CEO Eddie Lampert has been plowing a lot of money into making Sears a digitally savvy operation; its Shop Your Way member loyalty program now accounts for three quarters of all eligible sales it realizes. However, as revenues continue their steady decline quarter after quarter after quarter, and losses balloon, Sears has required regular infusions of cash from Lampert's hedge fund, ESL Investments -- undoubtedly because no other lender will risk cash on what is obviously a losing proposition.

Moreover, the retailer is reportedly starting to lose vendors who fear they won't get paid for merchandise they ship to Sears. It was widely reported toymaker JAKKS Pacific halted shipments ahead of the Christmas season, and several other major vendors were reportedly getting nervous too.

The retailer's real estate portfolio has long been seen as one of its biggest assets, but there hasn't been much interest among other large-square-footage operations in buying its stores. Where it has seen success is in dividing up its shuttered stores and renting them out to numerous smaller retailers. The real estate investment trust Lampert created in 2015, Seritage Growth Properties (NYSE: SRG), is pursuing just that strategy with the hundreds of stores it was seeded with, being able to raise the rents Sears paid by two or three times. Sears has done that too with a few of its stores. If it was to close all of its stores and move online, it could earn substantial amounts of money leasing out its properties while lowering its overhead.

A massive restructuring like that would certainly be more difficult than what The Limited is doing, and it's possible the clothing retailer won't be successful competing in the e-commerce space either. Further, many online-only retailers are starting to see the benefit of having at least some bricks-and-mortar presence. However, a transformation of this type might just be the way for Sears to stop the hemorrhaging of revenues and earnings that has plagued it for so long.

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Rich Duprey has no position in any stocks mentioned.

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