Sears Closing 150 Stores, Selling Craftsman in Attempt to Survive
Jan 05, 2017 04:11 PM EST
Sears Holdings is closing another 150 stores including 108 Kmart locations, and will be selling its Craftsman brand to raise cash, the ailing retailer announced on Thursday.
According to USA Today, the department-store chain had reached a deal to sell the tools brand to Stanley Black & Decker for a net present value of about $900 million, including future royalty payments.
Last Tuesday, the company revealed that it would close 108 Kmart stores and 42 Sears stores, referring the move as "difficult but necessary step" and to "strengthen the company's operations."
The verdict was announced several months after the company seeks for an elusive turnaround by putting the Craftsman, Kenmore and DieHard brands up for sale.
Sears also announced that it has granted an access to $500 million in secured loans provided by Sears CEO and Chairman Edward Lampert's ESL Investments who invested heavily in Sears as he attempts to revitalize the retailer, reported The Business Insider.
Sears shares rose 3.4% to $10.77 at 10:10 a.m. while Stanley Black & Decker stock rose 2.4% to $119.23. The steps, all together, reflect Sears' latest bid to stay alive in a retail market that is weakening similar chains such as competitors Macy's and Kohl's.
Meanwhile, Macy's on Tuesday identified 68 stores that the company would close or that they have already closed, and will corresponds with some 6,200 job cuts.
With $748 million loss in its fiscal quarter ended Oct.29 as sales at stores open at least a year fell 7.4%., selling the Craftsman brand to Stanley Black & Decker bolsters the balance sheet for Sears.
With the latest closures, the chain will still operate more than 1,300 stores and will continue to sell the Craftsman brand.
On the other hand, with 90% of its sales from Sears locations, Stanley Black & Decker said it would expand sales and manufacturing of the Craftsman brand.
"This transaction represents a significant step in our ongoing transformation to a membership focused business model," Lampert said in a statement.
"Craftsman has a storied history as an iconic American brand and in Stanley Black & Decker we have found a great owner that is committed to expanding Craftsman and helping it to reach its potential outside of its current channels."