Jump to content
kscarbel2

Sears sells Craftsman brand

Recommended Posts

Sears Buys Time With Craftsman Brand Sale, Store Closures

The Wall Street Journal  /  January 5, 2017

Cash-strapped retailer will sell its brand of tools to Stanley Black & Decker for about $900 million

Struggling retailer Sears Holdings Corp. has bought itself some breathing room through maneuvers that include the sale of its Craftsman brand for $900 million and the closure of 150 additional stores as it grapples with a prolonged sales slump and mounting losses.

Sears has suffered through several weak quarters and warned Thursday that same-store sales fell as much as 13% in November and December.

Over the past five years, Sears has booked $8.2 billion in cumulative losses.

The moves by Sears Holdings this week coupled with the injection of $1 billion in financing from its controlling shareholder and CEO, Edward Lampert, helped shares climb off recent lows and reassured suppliers, who had grown increasingly uneasy over the retailer’s prospects.

“Vendors had gotten really spooked,” said Gary Herwitz, a managing director of CoMetrics Partners, which advises companies that supply goods to Sears. “But now it seems that Sears bought themselves another year.”

Its shares, which traded above $142 in April 2007 after adjusting for subsequent spinoffs, fell to a low of $8 last week. On Thursday, the stock was up 0.3% to $10.39 as of 4 p.m. trading.

Sears has been cutting spending and selling off real estate to fund its operations, but its existing locations continue to struggle as shoppers spend more online and at other chains such as Wal-Mart and Target.

Jim Loree, chief executive of Stanley Black & Decker Inc., which is buying Craftsman, acknowledged the risks on a conference call, particularly since 90% of Craftsman’s sales come from Sears-related stores. He said the company structured the deal to minimize its risks by assuming no contractual Sears credit risk and no obligation to supply Sears beyond current levels. The retailer bought Craftsman in 1927 for $500.

“Eddie Lampert and his team at Sears Holdings have a compelling vision for the future of Sears, but they also have their share of challenges so there cannot be complete certainty about the future of Sears and what direction it might take,” Mr. Loree said.

Sears will receive $525 million when the deal closes, $250 million after three years, plus annual payments over 15 years.

Sears also said it would continue to shrink by closing 108 Kmart and 42 Sears stores, including the original Kmart location that opened in Garden City, Mich., in 1962. Over the past decade, Sears has closed, sold or spun off more than 2,000 stores.

Lampert, a hedge-fund manager, took control of Kmart out of a bankruptcy proceeding and merged it with Sears, Roebuck & Co. in 2005. But the two retail chains, which had long been hampered by outdated stores and inefficient operations, have continued to languish despite Lampert’s efforts to spend more on technology and introduce services such as buy online, pick up in store.

His firm owns more than 50% of the company’s shares and is a large creditor.

Lampert said this week many of the stores that Sears will close this year have struggled with their financial performance but the company had kept them open to maintain local jobs and in hopes that they would rebound.

The CEO also has been keeping the company afloat in recent years with asset sales and a series of loans. On Wednesday, affiliates of his hedge fund lent Sears $500 million backed by 46 real estate properties. That followed a $500 million secured letter of credit obtained the prior week. More asset sales are in the works. Sears said Thursday that its board has established a special committee to sell real estate with the goal of raising over $1 billion.

It also has been exploring strategic options for its Kenmore appliance and DieHard battery brands. But unless Sears’s retail business returns to profitability, Mr. Lampert will run out of assets to sell.

“There can be no illusion that there is any way to support a viable retail strategy,” said Mark Cohen, a former CEO of Sears Canada Inc., who left in 2004 over strategic differences and is now a professor at Columbia University.

Lampert has long stated that his goal is to return Sears to profitability. At the same time, he has limited investments in physical stores, leaving many Sears and Kmart locations looking outdated. Sears has also been more aggressive than its peers in reducing inventory.

According to an analysis by market research firm Haynes & Co., which visited stores in a dozen markets across the country during the week between Christmas and New Year’s, Sears had about 55% of the apparel on the floor that J.C. Penney carried. On the appliance front, Sears stocked double the number of refrigerator, microwave and washer/dryer models as Penney, which returned to the category in 2016.

“By reducing our inventory investment and our payables, we have decreased the level of vendor support needed to run our business,” Sears said.

Sears’s finance chief, Jason Holler, said last month that the retailer is focusing on big-ticket items, where it does better, while reducing its presence in apparel.

Sears spent $348 million to build inventory heading into the recently completed holiday season, compared with more than $1 billion last year. By comparison, Penney, which has half the annual revenue, spent roughly $700 million.

Share this post


Link to post
Share on other sites

Bah. 

Craftsman has gone down the shitter the last 5 years. When is the last time you found a Craftsman tool made in the USA? I think I may have even started a thread in here to bitch about it when I was shopping for tools for Large for his Birthday or Christmas a few years ago???

  • Like 1

Share this post


Link to post
Share on other sites

Stanley started in Connecticut started in 1843 in New Britian and still has some presence, pencil sharpen stapler in the corporate office. They were going to build over the line but Trump changed their mind. But they do own 50 + tool company's not to shabby came along way for a guy named Stanush-Stash .

Share this post


Link to post
Share on other sites

I don't know when Danaher's Apex Tool Group began producing Craftsman, but production shifted overseas in 2010.

That said, Danaher sold Apex to Bain Capital in 2012.

Apex's brands include K-D Tool, GearWrench, and Jacob's drill chucks.

Danaher also had Matco, but not under the Apex subsidiary, and spun it off in 2016 along with Jacobs Vehicle Systems and Gilbarco Veeder-Root into a new business called Fortive.

Share this post


Link to post
Share on other sites
6 hours ago, blackdog2 said:

Stanley started in Connecticut started in 1843 in New Britian and still has some presence, pencil sharpen stapler in the corporate office. They were going to build over the line but Trump changed their mind. But they do own 50 + tool company's not to shabby came along way for a guy named Stanush-Stash .

I think the only thing Stanley still makes in New Britain are steel tapes.  Sad.

You yuking it up or was " Stanley" a Polish immigrant???

I think Stanley also just bought the tool line that was aquired by Newell-Rubbermaid.

Share this post


Link to post
Share on other sites

Last I knew the original S.S. Kresge store building still stands just off US 209 south of Stroudsburg PA near the village of Kresgeville PA..

Share this post


Link to post
Share on other sites

Didn't Stanley go broke a few years ago? 

Share this post


Link to post
Share on other sites

MY wife retired from Sears after 25 years we watched its incremental demise for years! Their first mistake seemed to be their abandonment of their core customer base which was very loyal! This was of course the older customer ( middle age and older) They tried to sell clothing and other lines to younger people and failed miserably ! And of course they merged with arguably the worst managed "big box" store in existence The legendary K Mart! Lol  They have actually lasted longer than would have seemed possible! They did all the usual things a company in its "death throes" does, cut commissions on salespeople, which lowered morale, hence performance, went to the minimum number of employees,which pissed off the customers! Amazingly,the local store had a few competent employees but they seem to have left. The last time I was in the tool dept every power tool was Chinese made,with the exception of the hand tools! A couple of years ago they tried to get the managers to clean the bathrooms! My wife and the others didn't actually "refuse" to do this,that could get you fired! They just didn't do it! After a couple weeks Sears brought  back the crew of " green card workers"  That had previously cleaned the bathrooms! Lol!

Share this post


Link to post
Share on other sites

The last time I was doing one of my little surveys I noticed that Bosch had bought Black and Decker and a couple other well known brands possibly Dremel and they are ALL made in China and Mexico! I know most of you members are welders,well Hoberts Welding machines and Lincoln's are American made but Lincoln's torches and regulators are made in Poland! Hobart torches and regulators are made in China! They resemble Victor and use Victor tips and accessories! Lincoln seems to have bought Harris as their cartons say lincoln Harris! So there goes the cadillac and Mercedes of cutting and welding equipment to China and Poland!

Share this post


Link to post
Share on other sites

Oh brother thanks for the heads up not exciting news...Personally I don't even bother checking the labels anymore....Just assume it came over in a china can.. . Terrible.....As for Sears I think they just didn't go with the flow.and keep up with the times....But then again the help from our era....Are all retired anyway .... Lol...So la de da.....bob

Share this post


Link to post
Share on other sites

You know my wife bought me a set of combo wrenches for Christmas couple years ago and thier Stanley......China import....So is my thermos bottle... Both real good products but too bad American workers can get a shake of that action.....bob
 

Share this post


Link to post
Share on other sites

When I was a kid My parents and grandparent always went to Sears for all their big ticket items around home . And in the fall the Wish book always came in the mail and we'd be making out our Christmas which list  mainly out of it . Used to be a big deal when we'd get to go on an occasional trip to the city shopping  usually. Always included a trip to sears . But I've found about the last 15 years Sears stores over here in Canada suck they've totally went to shit !  They used to sell anything and everything and it was always good stuff but anymore it's just junk !  Last year I took my mother to the city to do here Christmas shopping and we went into sears the store is practically  bare now they don't stick anything or carry anything in general anymore and even there catalogue outlets they used to have in every small town are dying off . I can't se them being in business for too much longer myself . 

Share this post


Link to post
Share on other sites

I guess it's just a blast from the past like drive in resterants and rollers skating waitresses. ... Remember everybody would get excited to see the new Sears catalog every year....bob

  • Like 1

Share this post


Link to post
Share on other sites

I liked to know what percent of their business was made up from the craftsman brand.This may be the rapid start of the demise of Sears.

  • Like 1

Share this post


Link to post
Share on other sites

Craftsman tools are available in other places, too. My local ACE hardware store sells craftsman tools.

  • Like 1

Share this post


Link to post
Share on other sites
21 hours ago, Red Horse said:

I think the only thing Stanley still makes in New Britain are steel tapes.  Sad.

You yuking it up or was " Stanley" a Polish immigrant???

I think Stanley also just bought the tool line that was aquired by Newell-Rubbermaid.

You ll laugh their is about 2-3 loads of scrap of tape measures a week cumming in to Gateway terminal it adds color to the pile ,They farm a lot out to smaller company's 

Share this post


Link to post
Share on other sites

The Craftsman Houses,which were a kit that you could build yourself or have built,were a basic economical "starter home" Today the originals are "high dollar" in Tampa Bay! There a couple of new Craftsman clones in my neighborhood,I always liked the way they look,but they cost as much as any new middle class home today! As a couple members mentioned you could buy almost anything at Sears even a little Automobile! Almost like a crosley,for those of you old enough to remember those!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

Welcome to BMT!

...The world's best antique, classic & modern Mack Truck support forum! Founded in 2000, BigMackTrucks.com is the place to go for everything related to Mack Trucks!

BMT!

BigMackTrucks.com is owned and operated by Watt's Truck Center, New Alexandria, PA. This forum and it's contents are not affiliated with Mack Trucks, Inc. or Volvo Trucks North America.

×