Sears to sell Craftsman, shut 150 stores
• Sears Holdings Corp. agreed to sell its Craftsman tool brand to Stanley Black & Decker Inc. for about US$ 900 million, marking CEO Edward Lampert’s third move in the last two weeks to prop up the beleaguered retailer with fresh sources of funding.
Stanley will pay US$ 525 million at closing and US$250 million after three years, the companies said in a statement Thursday. The buyer also will make annual payments on new Craftsman sales for 15 years.
Separately, Sears said it’s closing 150 more stores, part of a program to shrink the retailer’s physical presence to stem its continued losses. The company posted another grim sales report Thursday, with comparable-store sales declining 12 per cent to 13 per cent during the holiday period. “We will continue to take actions to adjust our capital structure, meet our financial obligations and manage our business to better position Sears Holdings to create longterm value,” Lampert said.
Sears Canada is a separately owned company and is not directly affected by the U. S. company’s moves.
With Sears’s departmentstore business continuing to bleed cash, Lampert has turned to selling and spinning off assets to keep the company operating. The hedge fund manager, who also is the retailer’s chairman and largest investor, agreed earlier this week to lend the company $500 million (all figures US) and said last month that affiliates of his firm would offer it a $200-million letter of credit. Sears also has been reviewing its DieHard batteries and Kenmore appliance brands for potential sales.
The Craftsman sale is “another piece of the puzzle of trying to cobble together enough liquidity to navigate ‘ 17,” said Noel Hebert, an analyst at Bloomberg Intelligence. “But the more you sell to fund losses, the less there is to sell.” Hebert also said the price Sears sold the unit for was “disappointing.”
Investors cheered t he moves, sending Sears up as much as eight per cent to $11.19 in New York. The stock had slumped 55 per cent last year as the company continued to post losses. Shares of Stanley advanced as much as 3.6 per cent to $120.69.
For Illinois- based Sears, the sale is the latest in a long string of moves designed to generate cash for the ailing retail business. Still, challenges remain. Sears needs to raise a total of roughly $ 1.5 billion to make it through 2017 comfortably, Christina Boni, an analyst at Moody’s Investors Service, has estimated.