Sears Holdings Corp. is seeking to stop its bleeding and raise more cash by closing another 104 stores and selling its iconic Craftsman tools brand.
The struggling retailer said it has reached an agreement to sell Craftsman to Stanley Black & Decker for a net present value of about $900 million, including future royalty payments. Sears, which will continue to sell Craftsman products, had put the brand, along with its Kenmore and DieHard brands, up for sale several months ago.
Sears also said it planned to close 104 stores, including 78 Kmart stores and 26 Sears stores, during the next few months. The new store closings come about a week after the retailer announced separate plans to close 30 Kmart stores and 16 Sears stores.
The latest round of closings will leave the company with fewer than 1,500 stores by early 2017, down nearly 60% from 2011, when Sears had more than 3,500 stores, according to Business Insider. (Click here for a list of the stores slated to close.)
“Many of these stores have struggled with their financial performance for years and we have kept them open to maintain local jobs and in the hopes that they would turn around,” Sears said in a statement. “But in order to meet our objective of returning to profitability, we have to make tough decisions and will continue to do so, which will give our better performing stores a chance at success.”
With regards to Craftsman, Sears stressed it will continue to offer Craftsman-branded products, sourced from existing suppliers, through its current retail channels via a perpetual license from Stanley Black& Decker, which will be royalty-free for the first 15 years after closing and royalty-bearing thereafter. Currently, only approximately 10% of Craftsman-branded products are sold outside of Sears Holdings stores and the agreement will enable Stanley Black& Decker to significantly increase Craftsman sales in these untapped channels, the company said.
"This agreement represents a significant opportunity to grow the market by increasing the availability of Craftsman products to consumers in previously underpenetrated channels,” said Stanley Black & Decker president and CEO James M. Loree. “We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online.”
Sears CEO Lampert stated: “It's important for our members to know that we will continue to sell Craftsman in-store and online at Kmart and Sears, and Sears Hometown, and the structure of the transaction will provide Sears Holdings with a significant upfront payment, another payment in three years and an opportunity to participate in the growth of the Craftsman brand in both our stores and at other retailers selected and managed by Stanley Black& Decker.”