Sears Holdings

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Sears Holdings Corporation
TypePublic
Traded asNASDAQSHLD
NASDAQ-100 Component
IndustryRetailing
Founded2005[1]
HeadquartersHoffman Estates, Illinois, United States
Area servedUnited States, Puerto Rico, Canada, Mexico
Key peopleEdward S. Lampert
(Chairman)
Lou D'Ambrosio
(President and Chief Executive Officer)
ProductsFlagship Brands:
Craftsman
Kenmore
Other Brands
Lands' End
DieHard
Martha Stewart Everyday
Joe Boxer
Jaclyn Smith
Delver
RevenueDecrease US$ 41.567 billion (2012)[1]
Operating incomeDecrease US$ -1.501 billion (2012)[1]
Net incomeDecrease US$ -3.140 billion (2012)[1]
Total assetsDecrease US$ 21.381 billion (2012)[1]
Total equityDecrease US$ 4.281 billion (2012)[1]
Employees293,000 (2012)[1]
SubsidiariesKmart
Sears, Roebuck and Co.
KCD IP
Shop Your Way
MetaScale
Fit Studio
Lands' End
A&E Factory Repair
Sears Canada Inc. (90.4%)
Sears Roebuck of Mexico (100%)
Websitewww.searsholdings.com
 
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Sears Holdings Corporation
TypePublic
Traded asNASDAQSHLD
NASDAQ-100 Component
IndustryRetailing
Founded2005[1]
HeadquartersHoffman Estates, Illinois, United States
Area servedUnited States, Puerto Rico, Canada, Mexico
Key peopleEdward S. Lampert
(Chairman)
Lou D'Ambrosio
(President and Chief Executive Officer)
ProductsFlagship Brands:
Craftsman
Kenmore
Other Brands
Lands' End
DieHard
Martha Stewart Everyday
Joe Boxer
Jaclyn Smith
Delver
RevenueDecrease US$ 41.567 billion (2012)[1]
Operating incomeDecrease US$ -1.501 billion (2012)[1]
Net incomeDecrease US$ -3.140 billion (2012)[1]
Total assetsDecrease US$ 21.381 billion (2012)[1]
Total equityDecrease US$ 4.281 billion (2012)[1]
Employees293,000 (2012)[1]
SubsidiariesKmart
Sears, Roebuck and Co.
KCD IP
Shop Your Way
MetaScale
Fit Studio
Lands' End
A&E Factory Repair
Sears Canada Inc. (90.4%)
Sears Roebuck of Mexico (100%)
Websitewww.searsholdings.com

Sears Holdings Corporation is an American multinational corporation headquartered in Hoffman Estates, Illinois. The company was founded in 2005 by the merger of Sears (of Hoffman Estates) and Kmart (of Troy, Michigan).[2] It operates 4,000 retail locations under the mastheads of Sears, Kmart, and their subsidiaries. The company is the tenth largest retailer by annual revenue in the United States behind Walmart, Kroger, Target, Walgreens, The Home Depot, Costco, CVS Caremark, Lowe's and Best Buy.[3]

Contents

History

Founding

On November 17, 2004, Kmart Holdings Corporation announced its intention to purchase Sears, Roebuck and Co. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands. The merger of Kmart and Sears closed on March 24, 2005, following affirmative shareholder votes of both companies. Sears Holdings now operates Sears and Kmart stores. The company continues to market products under brands held by both companies.

The two companies cited several reasons for combining forces:

The company is directed by a board of directors composed of members from the two companies: seven members from Kmart's board, and three from Sears. Shareholders in the Kmart Corporation received one share in the new company. Shares of Sears, Roebuck and Company stock were converted into a combination of 55 percent stock and 45 percent cash (at $50 a share). Stockholders had a choice of receiving either stock or cash, subject to the predefined ratio.

The merger was completed on March 24, 2005, after receiving regulatory approval from the government and approval by shareholders of both companies.

2000s

The exterior of a typical Sears Essentials store.

Sears Holdings continues to operate stores under the Sears and Kmart mastheads. In 2005, Sears introduced a new store format called Sears Essentials; some Kmart stores were converted to Sears Essentials, as well as a few locations that were acquired from Walmart and several bankrupt discount retailers. The new store format combined the Sears store concept with the Kmart format, which was supposed to help the company better compete with Walmart and Target. The project has since been resigned, and merged with the Sears Grand concept.

Sears Holdings has begun cross-selling merchandise between its two brands. For example, Craftsman tools are now available in Kmart stores; they were previously exclusive to the Sears brand. However, Martha Stewart brand paint colors are now no longer available at Sears.

Sears Holdings owns 92 percent of Sears Canada,[4] a large department store chain in Canada, similar to the U.S. stores. (Sears Holdings failed in 2006 to buy the remainder of Sears Canada that it does not own because Bill Ackman took a 17.3 percent stake in it and prevented any takeover. He accepted to sell his stake at $30 a share on April 23, 2010.) Sears Holdings also owns 20 percent of Sears Mexico; Carlos Slim owns the other 80 percent. Like Target stores, Kmart-branded stores in Australia belong to Wesfarmers (which acquired former owners Coles Group in 2007); Wesfarmers also holds the rights to the Kmart brand in New Zealand.

In 2005, Sears Holdings sold a stake in hardware chain Orchard Supply Hardware to private equity firm Ares Management. On December 14, 2011, Sears Holdings announced that it would spin off its remaining holdings in Orchard Supply to shareholders effective December 30, 2011.[5]

In November 2006, speculation rolled around as The Chicago Sun Times reported that Sears may buy Safeway, Home Depot, Gap, BJ's Wholesale Club, Radio Shack, Pep Boys, Anheuser-Busch or all seven companies.[6] The Washington Post, in a March 11, 2007, article, described the current Sears as a hedge fund with money being diverted from the maintenance and improvement of stores to non-retail financial investments. A former executive was quoted as saying the company faced an "uncertain future". Surprisingly, a third of pre-tax income in the third quarter of 2006, according to The Washington Post, was due to financial trades not the retail business. However, these investments performed poorly in the fourth quarter.[7]

In 2007, the company placed its three major brands in KCD IP, a "separate, wholly owned, bankruptcy-remote subsidiary". KCD stands for the three brands: Kenmore, Craftsman, DieHard. KCD IP then issued $1.8 billion in bonds that were sold to Sears' insurance subsidiary based in Bermuda. Sears would thus pay KCD for use of the three brands' trademarks.[8]

On December 14, 2007, the company submitted a draft merger agreement to buy Restoration Hardware for $6.75 a share. Sears already owned 13.7 percent of the company.[9] That offer was withdrawn after Restoration's shares tumbled and a competing bid from private equity firm Catterton Partners was lowered to $4.50 per share. On February 28, Sears Holdings made an offer of $4.55 a share.

In June 2008, Sears launched Servicelive.com, which was intended to connect Sears customers with local contractors for home improvement projects. The site charges 10 percent of the contract price for each completed service, and offers more than 40,000 contractors. Servicelive.com was redesigned in March 2010.[10]

On February 22, 2010, the Sears Automotive business launched a new Independent Sears Auto Center franchise program that offers automobile dealers the opportunity to operate licensed Sears Auto Centers. The Coleman Auto Group of East Windsor, New Jersey, is the first dealership and is expected to open a Sears auto center in March 2010.[11]

The company has faced consistent quarters of decline since the merger of Sears, Roebuck, and Co. and Kmart Corp. Since 2005, the first year of results for the merged company, its income plunged 84 percent from $858 million, or $6.17 per diluted share.[12] Eddie Lampert has held the title of chairman of Sears Holdings over the period of decline. The first quarter of 2011 did not appear any better, with the company posting a net loss of $170 million, or $1.58 a share, for the quarter ended April 30. Some industry analysts feel the heart of the problem is Eddie Lampert's "penny-pinching" cost-savings by stifling investment into stores. Instead the company has been buying back stock and increasing its presence online.[13]

On December 27, 2011, after poor holiday sales, the company announced 100 to 120 Sears and Kmart stores would close.[14]

On February 23, 2012 Sears Holdings Corp. announced it is closing all nine "The Great Indoors" stores.[15]

Corporate affairs

Subsidiaries

Current

An older Sears exterior with newer signage.

Former

Exclusive brands

  • Alphaline – television accessories & wall mounts, headphones, cables & cases, Wii
  • Apostrophe – branded misses clothing and jewelry
  • BobbyO – Bobby Orlando branded teen clothing
  • Canyon River Blues – branded boys' and girls' clothing
  • Celestial Star – branded International Gemological Institute-certified diamond fine jewelry
  • Companion – tools (economy tools, non-lifetime warranty)
  • Covington – branded men's and misses clothing and footwear
  • Craftsman – tools and men's clothing
  • Craftsman Home-N-Shop – wet/dry vacuums
  • DieHard – auto, marine, tractor batteries and work boots
  • Dunlap – discontinued economy-priced tool brand
  • Easy Living – interior paint, primers, and accessories
  • Evolv – tools (economy tools, limited warranty)
  • Galaxy – branded discount appliances
  • Hydro-Glass – jet pumps
  • Kenmore Appliances – appliances
  • Kardashian Kollection (2012)
  • Kromedge (1955–1991) – tools with super-hard chrome plating
  • J.C. Higgins (1907–1964) – discontinued sporting-goods brand
  • Jaclyn Smith – branded clothing and home decor
  • Joe Boxer – branded underwear and home decor
  • Lands' End – branded upscale clothing and home decor
  • Latina Life – branded misses clothing and jewelry
  • LXI – discontinued electronics brand
  • MAPP – gas torch kits
  • Muzzler – car mufflers
  • Parallel – branded misses clothing
  • PENSKE – automotive testing equipment, automotive filters and parts
  • Personal Identity – branded juniors clothing
  • Promise Your Love – branded diamond fashion, diamond bridal, and lab created pink sapphire and ruby fine jewelry
  • Protron – branded discount electronics
  • Route 66 – branded clothing
  • Sears – Sears-branded tools and automotive parts
  • Sears-O-Pedic – high end mattresses made by Serta
  • Sears Tires – includes The Road Handler, Guardsman, Dynaglass, DynaPly, Silent Guard, Sears Crusader, Dyna-Sport, Superwide
  • Sesame Street –branded clothing
  • Simply Love – branded diamond solitaire fine jewelry
  • The SteadyRider – automotive shock absorbers
  • Structure – branded young men's clothing (label originally part of what is now the Express chain, purchased by Sears in 2003)
  • Ted Williams Brand (1961–1970s) – sporting and recreation goods
  • Thom McAn shoes
  • Toughskins – branded clothing
  • Two Hearts – branded maternity clothing
  • Ty Pennington style // sTYle – home decor
  • Weatherbeater – exterior paint, primers, and accessories
  • Winnie the Pooh – branded children's clothing

Sponsorships

The company sponsors, through the Sears Auto Centers, the Formula Drift Darren McNamara Sears/Falken Saturn Sky drift car. It sponsored the NASCAR Truck Series, using the Craftsman brand as the title sponsor, from the series' inception in the 1995 NASCAR SuperTruck Series presented by Craftsman to the 2008 season, when the agreement ended.[27] Craftsman tools remain the official tools of NASCAR. The company sponsored the television series Extreme Makeover: Home Edition. It sponsors and currently has naming rights to the Sears Centre, an 11,000-seat multi-purpose family entertainment, cultural and sports center, constructed in 2006 and location in Hoffman Estates. The company also sponsored the PBS television series "Mister Rogers' Neighborhood", under the name The Sears-Roebuck Foundation from 1968 until 1991. It sponsored the #10 Gillett Evernham Motorsports car of Scott Riggs for the September 2, 2007, running of the Sharp AQUOS 500 at California Speedway through its Sears Auto Center branch. However, Riggs failed to qualify for the event.

Diversity

Controversy

It is the target of an Industrial Workers of the World campaign to get the company to stop advertising through Havas' MPG. The union has been protesting outside of Kmart stores.[31] Sears Holding has not commented publicly about the matter.

Further reading

  • Katz, Donald R. (1987) The Big Store – Inside the Crisis and Revolution at Sears Viking Press (New York City)
  • Martinez, Arthur C. (2001) The Hard Road to the Softer Side: Lessons from the Transformation of Sears Crown Business (New York City)
  • Stevenson, Katherin Cole, and Jandl, H. Ward, (1995) Houses By Mail: A Guide to Houses from Sears, Roebuck and Company John Wiley & Sons; Hoboken, New Jersey
  • Turner, Marcia L. (2003) Kmart's Ten Deadly Sins – How Incompetence Tainted an American Icon John Wiley & Sons; Hoboken, New Jersey

See also

References

  1. ^ a b c d e f g "2010 Form 10-K, Sears Holding Company". U.S. Securities and Exchange Commission. http://www.sec.gov/Archives/edgar/data/1310067/000119312511062911/d10k.htm.
  2. ^ Barbash, Fred; Barbaro, Michael (November 17, 2004). "Sears, Kmart To Merge in $11B Deal". The Washington Post. http://www.washingtonpost.com/wp-dyn/articles/A56358-2004Nov17.html. Retrieved May 23, 2010.
  3. ^ "List of the top 100 US Retailers" (as of July 2011). National Retail Federation.
  4. ^ [1]. BusinessWeek.
  5. ^ "Sears Holdings Press Releases". Searsholdings.com. http://www.searsholdings.com/pubrel/pressOne.jsp?id=s16310_item96492. Retrieved 2012-03-08.
  6. ^ "Sears May Have Eye on Safeway". Chicago Sun-Times.
  7. ^ "Risky Side of Sears: Retailer Is Recast as a Hedge Fund, as Sales and Stores Decline, Chairman Focuses on Investment"]. The Washington Post. March 11, 2007.
  8. ^ "The New Alchemy At Sears". BusinessWeek. April 16, 2007. http://www.businessweek.com/magazine/content/07_16/b4030071.htm. Retrieved 4 August 2011.
  9. ^ "Sears Takes 13.7% Stake in Restoration Hardware". finanznachrichten.de.
  10. ^ Much, Marylin (March 18, 2010). "Sears Updates Its Online Marketplace ServiceLive.com". Investor's Business Daily. http://www.investors.com/NewsAndAnalysis/Article.aspx?id=527761. Retrieved April 13, 2010.
  11. ^ "Sears Starts Auto Center Franchise Program". February 22, 2010. http://www.newstatesman.com/automotive/2010/02/sears-auto-center-franchise. Retrieved February 23, 2010.
  12. ^ "'Twin Titanics' or Turnaround – Which Way Are Sears and Kmart Headed?". May 5, 2011. http://news.medill.northwestern.edu/chicago/news.aspx?id=185901. Retrieved May 30, 2011.
  13. ^ Jones, Sandra M. (May 19, 2011). "Sears Holdings Posts $170 Million Loss in 1st Quarter". Chicago Tribune. http://www.chicagotribune.com/business/ct-biz-0520-sears-20110519,0,4352753.story. Retrieved May 30, 2011.
  14. ^ "More than 100 Sears, Kmart stores to close". News & Record. Associated Press. 2011-12-27. http://www.news-record.com/content/2011/12/27/article/more_than_100_sears_kmart_stores_to_close. Retrieved 2011-11-27.
  15. ^ a b Sandra M. Jones. "Sears closing all nine Great Indoors stores". Chicago Tribune. http://www.chicagotribune.com/business/breaking/chi-sears-closing-all-nine-great-indoors-stores-20120223,0,3311965.story. Retrieved 23 February 2012.
  16. ^ [2]
  17. ^ Kmart At A Glance
  18. ^ [3]. mygofer.com.
  19. ^ [4]. suburbanchicagonews.com.
  20. ^ "About Sears". http://www.aboutsears.com/. Retrieved 2009-07-17.
  21. ^ "Sears History". Searsmedia.com. http://www.searsarchives.com/history/history1980s.htm. Retrieved 2010-01-01.
  22. ^ "Sears Grand Fact Sheet". Searsmedia.com. http://www.searsmedia.com/aboutsears/businesses/searsgrandfacts.htm. Retrieved 2009-07-17.
  23. ^ "This Week in Consumer Electronics, "Whirlpool Bears First Fruits Of Maytag Merger At Home Depot". This Week in Consumer Electronics. October 9, 2006.
  24. ^ Yard and Garden, Filling the Gap: Now That Home Centers are 'Servicing What They Sell,' Where Do Dealers Fit into This Rapidly Changing Retail Channel?; Profitably Running Your Service Department. Yard and Garden. March 2005.
  25. ^ "Sears Essentials Fact Sheet". Sears.
  26. ^ "Sears Ditches Sears Essentials Name". Crain's Chicago Business.
  27. ^ "Craftsman Dropping Sponsorship of NASCAR Truck Series". The Kansas City Star. December 4, 2007.
  28. ^ [5].
  29. ^ [6].
  30. ^ [7].
  31. ^ MPG Falsely Advertises Workers' Rights, examiner.com, August 11, 2009

External links