[BLOOMBERG] Sears Holdings Corp. agreed to sell its Craftsman tool brand to Stanley Black & Decker Inc. for about $900 million, marking Chief Executive Officer Edward Lampert’s third move in the last two weeks to prop up the beleaguered retailer with fresh sources of funding.Stanley will pay $525 million at closing and $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.
With Sears’s department-store 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 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."
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 percent to 13 percent 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 long-term value," Lampert said in Thursday’s statement.
Investors cheered the moves, sending Sears up as much as 8 percent to $11.19 in New York. The stock had slumped 55 percent last year as the company continued to post losses. Shares of New Britannia, Connecticut-based Stanley advanced as much as 3.6 percent to $120.69.
Iconic Brand
Craftsman has been part of Sears since 1927, when the retailer acquired the brand for $500. The tools debuted in the iconic Sears catalog two years later. By the 1940s, the brand benefited from a surge in power-tool sales. In 1981, President
Jimmy Carter... the worst president ever. Maybe the second worst. The votes aren't all in yet...
was given a Craftsmen woodworking set as his farewell gift when he left the White House.