Sears Sells Craftsman Brand, to Close 150 Stores

The cash-strapped retailer will sell its iconic Craftsman brand to Stanley for about $900 million


By Anne Steele
Updated Jan. 5, 2017 12:31 p.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 3.5% in afternoon trading, while shares of Stanley rose 1.8%.

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.

 

Fuck Sears. Sorry, they've done this to themselves.

 

They waited too long to become part of the online retailing world. That and their software engineers did not make their online sites easy to navigate.

Amazon straight up killed them along with a few other brick-and-mortar stores.

There's no doubt other factors were involved.

 

It is difficult to understand how the Craftsman brand can be worth a whole hell of a lot. Where as the name once really did mean something, like a real life time guaranty on tools.
But that was over 40 years ago. Now when you need replacement parts for tools, you can get them for most major brands through Grainger. Most except Craftsman and when you try to get parts through Sears, you run into the "no longer available" tag.

I have a table saw, Radial arm Saw, and a Bandsaw by Craftsman. No parts available. I fortunately have been able to make or adapt parts for the bandsaw in the machine shop. The table saw still works ok but the Radial arm saw is on limited duty for special cuts. Replace by a Compound Miter saw by Dewalt, a world of difference in precision.

 

You should see the fear in my Matco guy's eyes when I tell him what I buy on Amazon for less than half what he charges.

 

Haha. I've found awesome deals for tools on Amazon, ebay, and even craigslist.

 

I don't always buy tools from Amazon, but I always check their price. Same with Computer parts, I usually get them from Newegg, but Amazon is the check and plan B. Although others suppliers
also fill in some of the Computer stuff, like direct from China. But damn man you have to plan on propably getting two to get one and forget about guaranty. Their mail this way is free, but the return is ghastly.

 

Some of Harbor Freights low price China stuff is OK to good, if used for hobby work. Using their 20% off coupons and free stuff coupons makes it a better deal.

I just bought a table saw from Harbor Freight on Monday, and happy with the deal. Monday was a rare 25% off coupon day.

 

Jump and Carry 660 tool truck 227 dollars, Amazon 105

Belt grinder for spot welds tool truck 245 Amazon 89.99

These are just the things I've bought lately. You have to watch Amazon, some of the sellers are shifty.

I'm sorry but driving a box truck that gets 4mpg all over town and bullshitting with the techs isn't worth paying double to me. My Matco guy is really cool, we chat and he asks if I want his brochure or if he should throw it directly in the trash.

 

I agree, especially for stuff for one time duty. I used maybe 200 clamps of various kinds to built MarAzul. Got them all from Harbor Freight. Metal Chop saws, use them until they don't use and get another. Lot of stuff like that.

 

Amazon and Harbor Freight get the bulk of my business.

What I like about Harbor Freight is their on-line reviews for every product they sell. They do not try to hide a clunker product. Many of the reviews are written by full time professional craftsman that know tools. I have found some outstanding buys by reading the reviews. But when a product is getting bashed by the pros, I stay away and shop elsewhere.

I really like the service from Amazon, and if you shop smart, I agree, you can find great buys.

I do not like Sears, period. They pissed me off 45 years ago, and I have not shopped there since.

 

Dang! I guess, "me to" fits here.

 

I'm still waiting for the tweet from Trump taking credit for this......

 

Sears has always made the only quality hand-tools that were affordable to Real Americans. Anything approaching their quality costs 2-5 times as much. While I've only had to return a couple screwdrivers in my life, they simply handed me a new one and said "here you go!".

Stanley hand-tools, especially screwdrivers, rarely last me more than a few household projects, and they don't replace.

The cheap Chinese crap at Harbor Freight is flat out dangerous to use.

If only Trump had been elected 4 years ago, this American Icon would likely be thriving.

 

You guys are just older than me. They USED to make good hand tools that lasted forever. Then they started making inferior crap they used to warranty the good stuff I'd bought. Then they said they'd only warranty it once even though the new crap broke in weeks if you were lucky. That's been about 20 years ago for me. Fuck them.

Trump being responsible is like an EMT trying to save a guy who was beaten nearly to death by a large group and can't save them.

Sears was on life support for years. Not even sure why they kept trying.

 

Whatz you talken about, I still have 9 fingers left. Thems pretty good odds at my age.

Or is that supposed to be 7 fingers, and most of two thumbs?

 

And all those Sears executives who lead them to the trash heap probably got huge bonuses and/or golden parachutes. Welcome to corporate America....

 

Got my first Kay acoustic guitar from a Sears catalogue in 1964...that and Penny's were how we shopped ..those days are gone and Walmart has wiped them out ..sad to see....I bought all my freezers, washers, dryers, etc from Sears and liked their service

 

Nobody mentioned the Sears catalog yet? Nipple showing behind a lace bra was a gift from above when I was a kid.