At a tough time for Sears Holdings, the beleaguered retailer has collected some much-needed cash – by selling one of its most beloved brands.
The company said on Thursday that it had sold its Craftsman line of tools to Stanley Black & Decker for at least $775 million, part of an effort to raise cash as it continues to grapple with troubles in its business.
For Sears, selling one of its classic brands – one it created nearly a century ago – is the latest move to bolster its balance sheet during a prolonged sales slump. The company’s chairman and chief executive, Edward S. Lampert, has struggled for years with ways to help the company, as much through esoteric financial maneuvers as through operational fixes.
The company said Thursday that comparable-store sales at its Sears and Kmart units for November and December were down at least 12 percent.
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That kind of poor performance has battered Sears’ financial health. As of Oct. 29, the retailer said that it had $258 million in cash and equivalents on hand, compared with $3.1 billion in long-term debt. Its market value on Thursday morning, by point of comparison, stood at $1.2 billion even after a jump in its stock price after the Craftsman news.
On Thursday, Sears listed its latest group of initiatives aimed at shoring up its cash position, from closing 150 more stores to raising up to $1 billion through both a $500 million loan backed by its real estate and a previously announced loan from Lampert’s hedge fund.
“We are taking strong, decisive actions today to stabilize the company and improve our financial flexibility in what remains a challenging retail environment,” Lampert, who is also Sears’ biggest shareholder, said in a statement. “We are committed to improving short-term operating performance in order to achieve our long-term transformation.”
Stanley Black & Decker will get the opportunity to sell Craftsman tools in even more outlets. As of now, only 10 percent of the product lineup is sold outside Sears stores, mostly in select retailers like Ace Hardware.