Sears isn’t just trying to stave off the grim reaper by closing stores and borrowing hundreds of millions of dollars from CEO Eddie Lampert twice in two weeks. The beleaguered retailer is selling off its iconic Craftsman brand to Stanley Black & Decker for $900 million.
Sears announced Thursday that it had reached a purchase agreement with Stanley Black & Decker that will allow the Craftsman brand to be sold at an array of other retail outlets.
Through the agreement, Black & Decker will receive the rights to develop, manufacture, and sell Craftsman-branded products in non-Sears Holding retailers, industrial, and online sales channels.
Currently, just 10% of Craftsman-branded products are sold outside of Sears Holdings.
Sears won’t lose all of its ties to the iconic brand it first bought in 1927. Instead, under the agreement, the company will continue to offer Craftsman-branded products through a license from Black & Decker royalty-free for 15 years.
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“We are pleased to reach this agreement, after determining that externalizing the Craftsman brand would accomplish our goals of driving value for Sears Holdings and positioning Craftsman for future growth,” Sears Holding Chairman and CEO Edward Lampert said in a statement.
Stanley CEO James Loree says in a statement that his company plans to invest in the brand and continue “producing quality products at a great value.”
The terms of the deal stipulate that Stanley Black & Decker pay $525 million at closing and $250 million in three years, as well as annual payments on new Stanley Black & decker Craftsman sales for 15 years.
The deal, which has been approved by the Boards of Directors for both companies, is expected to closed sometime in 2017.
The sale of Craftsman is just the latest in a series of moves to generate cash and prop-up the sinking retailer.
In May 2016, the company said it was exploring unspecified alternatives for its other house-brands Kenmore and DieHard. The following month, Sears said it would begin selling Kenmore TVs. However, Bloomberg reports that the brands are still being earmarked for potential sales.
Additionally, just yesterday, Consumerist reported that the company would borrow another $500 million from its CEO until it could sell more stores.
“Did you just say another?” Yes, we did. In Sept. 2014, the company borrowed $400 million from ESL Investments, a hedge fund entirely owned by Lampert. Two years later in Aug. 2016, the company borrowed $300 million from the same hedge fund.
More recently, at the end of the year, company announced it had secured a letter of credit from the hedge fund of at least $200 million maxing out at $500 million, which allows Sears Holdings to keep its cash flow going as it continues to pretend to operate a retail company.
Are you a fan of Craftsman tools? Tell us how you feel about today’s news by shooting us an email with your thoughts at tips@consumerist.com
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