Sears (SHLD) is in bad shape. Sales are down, profit is nonexistent, and stores are closing. Even the chairman has described the company's finances as unacceptable.

But is Sears' latest move a stroke of genius or the final nail in the coffin?

The company doesn't have much going for it, but what it does have are its brands. Craftsman tools. DieHard batteries. Kenmore appliances. People know and trust them. They are some of Sears' most valuable assets.

Now Sears wants to hand those assets over to competitors. The company is hiring a firm to help license the brands, Bloomberg reports.

That's a little different from the current relationship Sears has with Ace hardware and Costco (COST). Sears sells its own products there and shares the profits with those partners, Bloomberg reports.

But the proposed new model is a licensing setup whereby Sears would simply charge a fee for the use of its names on products.

Which prompts a question: As more of Sears' brands get into other stores, why would anyone even visit Sears at all? And what in the world is Sears' end game?

One analyst discusses Sears' weak businesses in the following video.

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The new licensing deal "will have a short-term benefit, but long-term it will be a disaster," one retail consultant told Fortune. "Sears is in total collapse -- earnings, sales, everything is tanking -- so they embark on this strategy with their brands that fundamentally goes against what every retailer in the United States is doing, what every retailer is trying to accomplish, which is to differentiate themselves from their competitors."

Sears doesn't see it that way. The company says the move will only increase the value of its brands.

Maybe Sears' thinking goes a little more like this: People love our brands but they hate our stores. If we take our brands to the people, maybe we can boost short-term revenue and create more loyalty in the process.

"You could make the case that the Sears experience is going to be amplified elsewhere," the publisher of The Licensing Letter told Bloomberg. "If you can exploit your trademarks in a wider context, you may be building your business long term."

It's a gamble, no doubt. But Sears is desperate. Revenue dropped to $43.3 billion last year from $50.7 billion in 2008, Fortune reports. For the quarter that ended July 30, same-store sales fell 1.2% from the year-ago period. Sales at Kmart, which Sears also owns, were flat. The quarterly loss for shareholders was $1.37 a share.

The biggest question in this latest move is about the long-term effect. Will the added licensing revenues help Sears limp along? Or is this yet another disaster in the making?

Sears' share price has been on a remarkable climb over the past month, however, so maybe investors are optimistic. But the company has plumped up that share price over the years with a long series of buybacks, so it's hard to tell how much of Sears' climb is truly attributable to investor enthusiasm.