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Sears Sells Craftsman Brand, to Close 150 Stores

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Forum topic by TheDane posted 01-05-2017 04:32 PM 578 views 0 times favorited 14 replies Add to Favorites Watch
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TheDane

5010 posts in 3169 days


01-05-2017 04:32 PM

http://www.wsj.com/articles/sears-sells-craftsman-brand-to-stanley-black-decker-1483623215

Sears Sells Craftsman Brand, to Close 150 Stores
The cash-strapped retailer will sell its iconic Craftsman brand to Stanley for about $900 million

The Wall Street Journal
By ANNE STEELE
Updated Jan. 5, 2017 9:48 a.m. ET

Sears Holdings Corp. said it would close another 150 stores and sell its Craftsman tool brand for $900 million, as the cash-strapped retailer continues to shrink and battle slumping sales.

Sears is flipping the Craftsman brand to Stanley Black & Decker Inc., and it will license back the ability to sell Craftsman-branded products royalty-free for 15 years after the deal’s closing. The acquisition gives Stanley the rights to develop, manufacture and sell Craftsman-branded products outside of Sears.

At present, just 10% of Craftsman-branded products are sold outside of Sears. Stanley Black & Decker said the deal will help boost Craftsman sales in untapped channels.

“We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online,” said Stanley Black & Decker Chief Executive James Loree. Stanley also recently signed a $1.95 billion deal to buy Newell Brands Inc.’s tools business.

A Sears spokesman confirmed the unlimited lifetime warranty on Craftsman hand tools made in the U.S.—“a hallmark of the brand for generations”—will be kept in place.

On Wednesday, Sears announced sweeping closures of 150 of its namesake and Kmart stores—which it called “a difficult but necessary step as we take actions to strengthen the company’s operations and fund its transformation.”

Many of the stores slated to be shut down have struggled financially for years but have been kept open to maintain local jobs in the hopes they would turn around.

“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,” the company said.

Shares of Sears jumped 7.6% in morning trading, while shares of Stanley rose 2%.

The sale and closures come amid Sears CEO Edward Lampert’s yearslong effort to revive Sears, including a recent $1 billion injection into the struggling retailer.

Mr. Lampert said the deal represents a significant step in the company’s transformation to a membership-focused business model. He called Stanley “a great owner that is committed to expanding Craftsman and helping it to reach its potential outside of its current channels,” he said.

On Wednesday, Sears said it obtained a $500 million loan secured by mortgages on 46 properties from affiliates of ESL Investments Inc., the hedge fund run by Mr. Lampert. That is in addition to a $300 million secured letter of credit that the retailer received from ESL affiliates last week.

ESL last week also entered into a nonbinding term sheet for a $200 million unsecured loan to Seritage Growth Properties, a real-estate investment trust that largely consists of Sears and Kmart stores.

Also Thursday, Sears said sales during the quarter so far have continued to be challenging. The company estimates same-store sales at Sears and Kmart for the first two months of the fourth quarter have declined 12% to 13%.

Stanley’s Mr. Loree said his company will expand its manufacturing footprint in the U.S., noting that the firm has “increased our manufacturing head count by 40% in the past three years.”

Stanley Black & Decker will pay Sears $525 million at closing, $250 million after three years, and annual payments on new Stanley Black & Decker Craftsman sales for 15 years. The license granted to Sears will remain royalty-free for 15 years, then 3% thereafter.

Stanley Black & Decker expects the sale of Craftsman branded products to contribute $100 million in sales annually for the next 10 years. The deal is expected to increase earnings by 10 cents to 15 cents a share in the first year, increasing to 35 cents to 45 cents by year five and 70 cents to 80 cents by year 10, excluding $20 million of deal-related costs.

-- Gerry -- "I don't plan to ever really grow up ... I'm just going to learn how to act in public!"


14 replies so far

View Handtooler's profile

Handtooler

1388 posts in 1638 days


#1 posted 01-05-2017 06:36 PM

Thanks for the info. I would not have known for quite awhile since I don’t subscribe to the Wall Street Journal.

-- Russell Pitner Hixson, TN 37343 bassboy40@outlook.com

View bruc101's profile

bruc101

1134 posts in 3048 days


#2 posted 01-05-2017 06:45 PM

And Macy’s announced they’ve started laying off 10,000 people.With that and Sears laying off several 1000 people this is definitely not good for our economy.

-- Bruce Free Plans http://plans.sawmillvalley.org

View Joe Lyddon's profile

Joe Lyddon

9526 posts in 3558 days


#3 posted 01-05-2017 08:54 PM

This looks like it will be a good deal to both parties… Sears and Stanley Black & Decker…

It could be good for US too… if they improve quality, etc. etc.

-- Have Fun! Joe Lyddon - Alta Loma, CA USA - Home: http://www.WoodworkStuff.net ... My Small Gallery: http://www.ncwoodworker.net/pp/showgallery.php?ppuser=1389&cat=500"

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papadan

1393 posts in 2874 days


#4 posted 01-05-2017 09:03 PM



This looks like it will be a good deal to both parties… Sears and Stanley Black & Decker…

It could be good for US too… if they improve quality, etc. etc.

- Joe Lyddon


Joe, you got me laughing now!

-- Carpenter assembles with hands, Designer builds with brains, Artist creates with heart!

View Bill White's profile

Bill White

4489 posts in 3466 days


#5 posted 01-05-2017 10:31 PM

Yeah, right! Do you really expect SB&D to improve quality?
This just another defection to the “low cost/low sell price, screw the consumer concept”.
More power to the “buy old stuff” mentality.
Bill

-- bill@magraphics.us

View Joe Lyddon's profile

Joe Lyddon

9526 posts in 3558 days


#6 posted 01-06-2017 03:53 AM

... Well, I can Dream can’t I?? LOL

-- Have Fun! Joe Lyddon - Alta Loma, CA USA - Home: http://www.WoodworkStuff.net ... My Small Gallery: http://www.ncwoodworker.net/pp/showgallery.php?ppuser=1389&cat=500"

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runswithscissors

2233 posts in 1531 days


#7 posted 01-06-2017 04:42 AM

Maybe another corporate blunder—-on Stanley/B&D’s part?

-- I admit to being an adrenaline junky; fortunately, I'm very easily frightened

View pontic's profile

pontic

65 posts in 114 days


#8 posted 01-06-2017 04:58 AM

Ace Hardware is carrying more and more craftsman tools.

-- Illigitimii non carburundum sum

View Woodbum's profile

Woodbum

752 posts in 2571 days


#9 posted 01-06-2017 02:46 PM

Not sure if this is a good or bad deal. Maybe SB & D will do for Craftsman what they did for Porter Cable…in reverse. Hated to see PC relegated to bargain brand status with less quality tools. P C used to be a top quality line. At least they decided to keep up the quality on Dewalt products. Sears has been sucking wind since years ago when they deviated from their core competency and started in real estate sales, financial products etc. and did not focus on their retail and catalog side enough. The catalog was doomed in part because of the advent of on line sales, as well as their own mismanagement . How many of us out here started with Craftsman tools in their shops? I though I had died and gone to heaven every time I bought one of my stationary Craftsman tools. My 113 series table saw lasted me 24 years and performed very well. I hated to see their quality go. Oh well, that’s life in the 21st century; and it will just keep getting worse. Good Luck, Work Safely and Have Fun!

-- "Now I'm just another old guy wearing funny clothes"

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Mainiac Matt

6128 posts in 1834 days


#10 posted 01-06-2017 03:17 PM

I’m wondering how this will affect their lifetime warranty on their hand tools.

-- Pine is fine, but Oak's no joke!

View muleskinner's profile

muleskinner

888 posts in 1942 days


#11 posted 01-06-2017 04:16 PM

If they close my local Sears store I won’t miss it one iota.

I can remember going to the local Sears store in my small home town (~11k) with my father and later as a young man. You would go up to the service counter and ask for a set of brushes for your Craftsman drill, or a timer switch for your Kenmore washing machine and more than likely the counterman would go pull it off the shelf.

Today, if I went to my Sears store and wanted a door switch for a Kenmore dryer, the sales person would look up the part on searspartsdirect.com and tell me they’d have it in in four or five days. At which point I’d tell them “never mind”, go home and order it online myself and most likely get it sooner and delivered to my front door.

-- Visualize whirled peas

View JayT's profile

JayT

4904 posts in 1717 days


#12 posted 01-06-2017 04:56 PM



I m wondering how this will affect their lifetime warranty on their hand tools.

- Mainiac Matt

SBD is supposed to honoring the lifetime warranties.

-- Pay heed all who enter: Beware of "the Phog" Rock Chalk, Jayhawk

View sawdustjunkie's profile

sawdustjunkie

351 posts in 1223 days


#13 posted 01-06-2017 05:17 PM

I still have many Craftsman hand tools along with some nicad drills that still work great. Only thing wrong with the drills are they are very heavy compared to the newer Makita and other brands and the battery charge doesn’t last as long.
I also had a craftsman 113 table saw that was at least 25 years old, never failed and always worked great. I just needed to cut thicker material and the 1.25 h.p. just worked too hard for that task.

-- Steve: Franklin, WI

View MrRon's profile

MrRon

3961 posts in 2749 days


#14 posted 01-06-2017 11:58 PM

I’m surprised that Sears would sell off the “Craftsman” line. Craftsman and Kenmore are their two best lines. What else is left. They would be better off to just sell Craftsman and Kenmore and ditch the rest. Sears is like a junk bus; only the Craftsman engine and Kenmore transmission are worth anything.

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