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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). 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.
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:
- Sears had begun investing in new, larger off-mall stores, called Sears Grand. Earlier in the year, Sears had purchased dozens of current Super Kmart locations; the merger permitted the combined company to accelerate that process.
- Proprietary brands held by both companies could be made more accessible to their target demographics by leveraging their combined real estate holdings. This was estimated to be an expected $200 million a year in revenue synergies.
- At least $300 million a year in cost savings was expected annually, particularly in the supply chain and in administrative overhead.
- The establishment of a shared customer-focused corporate culture between the two companies was estimated to yield improvements in revenue per unit area.
- Preservation of two brands after the merger was intended to allow Sears Holdings to continue focusing on different customer demographics, without alienating either group.
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.
The exterior of a typical Sears Essentials
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, 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.
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. 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.
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.
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. 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.
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.
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. 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.
On December 27, 2011, after poor holiday sales, the company announced 100 to 120 Sears and Kmart stores would close.
On February 23, 2012 Sears Holdings Corp. announced it is closing all nine "The Great Indoors" stores.
- Kmart is a chain of discount stores that are usually free-standing or located in strip malls. They carry electronics, music, movies, bedding, household hardware, sporting goods, clothing, toys, jewelry, office supplies, health and beauty products, home decor, and a limited selection of food items. Many stores also have a garden center, a Jackson Hewitt tax center, a pharmacy, and usually a K-Cafe or a deli serving Nathan's Hot Dogs and pizza. Kmart stores range from 80,000–110,000 sq ft (7,400–10,000 m2). Some of these stores were converted into Super Kmart, and most of them were converted into Big Kmart. Urban multilevel variants of a Kmart store are located in Middle Village, Queens, New York; Southbury, Connecticut; and Philadelphia, Pennsylvania. The world's largest Kmart store is located in Guam.
- Big Kmart is a chain of discount stores that carry everything a regular Kmart carries, but with an emphasis on home decor, children's clothing, and more food items such as meat and poultry, baked goods, frozen foods and an extended, but limited section of garden produce; however, they do not feature a bakery, a delicatessen, or fresh seafood. Big Kmart stores range from 84,000–120,000 sq ft (7,800–11,000 m2). Big Kmart stores also feature a garden center, a pharmacy, a branch of a local bank, a Jackson Hewitt tax center, an Olan Mills portrait studio, an arcade, a K-Cafe or Little Caesars Pizza station, and sometimes a Kmart express gas station. Since the merger with Sears, many stores have been rebranded as Kmart.
- Kmart SuperCenter is a chain of hypermarkets that carry everything a regular Kmart carries, but also have a full grocery section with meat and poultry, baked goods, a delicatessen, garden produce, and fresh seafood. Kmart SuperCenter stores range from 140,000–190,000 sq ft (13,000–18,000 m2). These stores are also known as Super Kmart. SuperCenter stores also feature a garden center, a video rental store, a branch of a local bank, an arcade, a portrait studio, a Jackson Hewitt tax center, a pharmacy, and usually a deli cafe or Little Caesars Pizza station. Several also include Kmart Express gas stations, and most had an auto center. 32 Kmart SuperCenters are still open, most having been closed during the two rounds of closures in 2002 and 2003, and 20 had their groceries taken out, converting them into Big Kmart and Sears Grand locations. Some of the surviving Super Kmarts were those in regions without a strong Walmart presence, including Ohio and Michigan. A typical SuperCenter sells around 30 million dollars of merchandise during one fiscal year. In the late 1990s and early 2000s, urban multilevel variants were opened that included two-level, 195,000 sq ft (18,100 m2) locations and three-level, 200,000 sq ft (19,000 m2) locations; these carry everything a Kmart SuperCenter carries, but do not have a Kmart Express gas station and an Auto Center like most Kmart Super Centers; they do feature a Bo Rics Hair Salon, a Fifth Third Bank branch, an expanded Jackson Hewitt Tax Center, escalators, elevators, shopping cart conveyors, and parking garages, which many Super Kmarts stores do not have. Most of these locations were briefly remodeled and re-branded to Sears Grand in the late 2000s.
- mygofer: A on-line and brick-and-mortar retail concept launched in spring of 2009 proposing to make shopping better and life easier by offering its customers the benefits of online shopping, paired with the convenience of a storefront.
- Lands' End aside from carrying the Lands' End clothing line at 222 "store within a store" departments inside Sears domestic broadline locations, Sears Holdings also operates fourteen Lands' End stores that exclusively carry Lands' End clothing. These stores are located in outlet malls and regular malls.
An older Sears exterior with newer signage.
- Sears Full-Line is a chain of department stores that are located in shopping malls; they carry clothing, jewelry, home appliances, household hardware, lawn and garden supplies, lawn mowers, paint, sporting goods, automobile repair, office supplies, electronics and school supplies. Sears stores are usually multi-level. There are 926 full-size Sears stores in the United States. There are also 301 Sears locations in Canada and 66 in Mexico. The largest Sears Full-Line Store is located at the Toronto Eaton Centre in Canada.
- Sears Grand is a chain of hypermarkets typically located away from shopping malls. Many Sears Grand locations are retrofit remodels of existing Kmart supercenter stores. They carry everything a Sears department store carries, plus health and beauty products, a pharmacy, toys, baby care, cleaning supplies, home décor, pet food, cards and party supplies, books, magazines, music, Little Caesars Pizza Station, movies, and a selection of groceries which is limited mostly to dry goods. Sears Grand stores range from 165,000 to 210,000 square feet (15,300 to 19,500 m²). The first Sears Grand opened at Jordan Landing in West Jordan, Utah in 2003. At 225,000 square feet (20,900 m2), the Jordan Landing store is currently the largest in the chain.
- Sears Appliance & Hardware is a chain of hardware stores that carry the whole line of Sears hardware and are usually free-standing or located in strip malls. Typically these stores are about 25,000 square feet (2,300 m2). In 2005 and 2006, some of these locations closed due to their proximity to, and therefore competition with, nearby Sears department stores.
- Sears Home Services is a division of Sears that specializes in appliance repair, lawn and garden services, HVAC service, as well as most in home services. Sears Home Services can also do repair on small appliances in-store.
- Sears Parts & Repair Center is a chain of service centers that typically sell parts for lawn-and-garden equipment and appliances and also feature a carry-in point for customers to bring merchandise in that needs to be repaired either in- or out-of- warranty. Typically labeled Sears Service Center or Sears Home Central, two names that also refer to the Parts and Repair Centers. Sears had previously closed some of these down as more of its service and replacement part business became home-based.
- A&E Factory Service is a joint venture held by Whirlpool and Sears Holdings. A&E Factory Service is a network of mobile service vans with a long history of performing appliance repairs.
- Sears Essentials, a chain of department stores that are located away from shopping malls (free-standing), carries everything a regular Sears carries, plus health and beauty products, toys, baby care, cleaning supplies, home décor, pet food, cards and party supplies, books, magazines, music, films, and a limited amount of food items. Sears Essentials stores are between 70,000 to 100,000 square feet (6,500 to 9,300 m²). These stores are essentially Sears-Kmart hybrid stores. Many Sears Essentials feature a Little Caesars Pizza Station and a pharmacy. Sears Essentials currently has a pilot program wherein some stores have had the Kmart merchandise (food, health/beauty, stationery, cleaning supplies) removed, Sears merchandise assortment expanded, and the "Essentials" part of the name removed and replaced with the "Grand" name.
- Sears Hometown (formerly Sears Dealer Store) is a chain of smaller stores that are operated as a store where the proprietor owns or leases the real estate while Sears Holdings handles the marketing and owns the inventory, and there are no franchising fees levied against the store proprietor. These stores are usually located in smaller markets that do not support full-sized Sears. They are signed as Sears and are usually free-standing or located in strip malls. They primarily concentrate on hardware, appliances and lawn-and-garden supplies. This was originally intended as a replacement to the now-discontinued Sears Catalog. There are 180 dealer stores in Canada. Sears announced in 2012 it would spin off Sears Outlet and Hometown Stores into a new company called Newco.
- Sears Outlet an outlet version of Sears department stores located in various retail locations across the U.S. The stores carry new, one-of-a-kind, out of carton, discontinued, used, scratched and dented merchandise at twenty to sixty percent off regular retail price. While a wide variety of products are available, appliances make up a large majority of available merchandise. There are eleven outlet stores across Canada (with one as a liquidation center). Sears announced in 2012 it would spin off Sears Outlet and Hometown Stores into a new company called Newco.
- The Great Indoors was a chain of free-standing home-décor stores that carry high-end appliances, bedding, and kitchen-and-bath fixtures. The Great Indoors also offered custom kitchen and bathroom design services. The Great Indoors stores were 130,000 square feet (12,000 m²). On February 23, 2012 Sears Holdings Corp. announced it is closing all nine The Great Indoors stores.
- Orchard Supply Hardware is a chain of free-standing hardware stores that carry home repair, hardware products and lawn and garden supplies. It was spun off from Sears in January 2012.
- 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
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. 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.
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. Sears Holding has not commented publicly about the matter.
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