Home / Knowledge / News / Retail / Transform taking over Sears Hometown and Outlet Stores

Transform taking over Sears Hometown and Outlet Stores

10
Jun '19
Pic: Sears Holding
Pic: Sears Holding
Transform Holdco, a leading integrated retailer and home to Sears and Kmart, is taking over Sears Hometown and Outlet Stores. They have signed a definitive merger agreement in this connection. Under the deal, Transform will acquire the outstanding shares of Sears Hometown not owned by ESL Investments, and its affiliates at $2.25 per share in cash.

This is subject to an upward adjustment in the event a sale of Sears Hometown's Outlet Segment has occurred that satisfies criteria specified in the merger agreement.

ESL Investments and its affiliates, the majority owners of Transform, presently hold 58 per cent of the outstanding shares of Sears Hometown.

The transaction will reunite Sears and Kmart with Sears Hometown, which was spun off from Sears Holdings Corporation, the former parent company of Sears and Kmart, in 2012. Having these businesses under common ownership will accelerate Transform's strategy of growing its smaller store format by adding Sears Hometown stores. It will also expand the company's footprint as a multi-channel business that can serve customers through a variety of shopping experiences to meet their needs, provide growth for Transform's marquee brands, including Kenmore and DieHard, and increase opportunities for Sears Home Services and Financial Services businesses, as well as the Shop Your Way social shopping destination and rewards programme.

Edward S Lampert, chairman of Transform, said, "We are excited to bring Sears Hometown, its associates and network of independent dealers and franchisees back into the Sears and Kmart family. Our investment demonstrates our commitment to growing Transform for the benefit of our members and customers, associates, vendors and communities across the country. While, initially, the companies will operate independently, we see many opportunities where we can partner to serve our customers better and enjoy efficiencies of scale once these businesses are under one roof."

Will Powell, chief executive officer and president of Sears Hometown and Outlet Stores, said, "I believe this is the best path forward for Sears Hometown and serves the interests of all our constituents, including our customers, associates, dealers, franchisees and stockholders. We believe that reuniting our Sears Hometown segment stores with Transform's Sears full-line stores will result in a more consistent customer experience across Sears branded storefronts, generate higher total revenues and leverage efficiencies of scale to improve costs and margins, all of which could lead to improved profitability for Sears Hometown's dealers and franchisees."

Sears Hometown presently maintains a network of 491 Hometown stores and 126 Outlet stores located in 49 states, Puerto Rico and Bermuda and generated $1.4 billion in net sales in 2018. When the two companies are combined, they will rank as the third largest appliance retailer in the United States in terms of sales.

Under the terms of the merger agreement, Sears Hometown has a specified period of time in which it can market and sell its Sears Outlet and Buddy's Home Furnishing Stores businesses (together, the "Outlet Segment") to a third party for not less than $97.5 million. If the Outlet Segment is sold in accordance with the terms of the merger agreement, it will not be acquired by Transform in the acquisition of Sears Hometown.

At the completion of the acquisition of Sears Hometown, each share of Sears Hometown's outstanding common stock not owned by ESL Investments, and its affiliates will be converted into the right to receive a base amount in cash equal to $2.25 per share. Sears Hometown must enter into an agreement to sell the Outlet Segment no later than August 24, 2019 (extendable by 10 days in specified circumstances) and the sale must be completed by October 23, 2019 (extendable by 15 days in specified circumstances).

Under the terms of the merger agreement, Transform will have the opportunity to match the economic terms of any proposed sale of the Outlet Segment to a third party that is expected to result in net proceeds to Sears Hometown of less than $120 million.

Will Powell, chief executive officer and president of Sears Hometown and Outlet Stores, said, "As we have been publicly reporting, the Outlet business is profitable and has a unique business strategy which should enable further growth. We are now beginning the Outlet Segment sale process with interested parties, while continuing to operate the Outlet stores without any business interruption."

"We will work with Transform over the coming months to ensure that our dealer network is in a position to leverage the best of Transform's unique brands, services and online capabilities to bring additional value to their customers," Powell added.

The transaction was negotiated and approved by a special committee of Sears Hometown's board of directors, consisting of an independent and disinterested director. The closing of the transaction is expected to take place in Sears Hometown's third quarter of 2019, at which time Sears Hometown will cease to be a publicly-held corporation. (SV)

Fibre2Fashion News Desk – India


Must ReadView All

Pic: Shutterstock

Apparel/Garments | On 21st Sep 2020

UK govt extends support to stop business evictions

UK businesses will be protected from the threat of eviction until...

Pic: Shutterstock

Textiles | On 21st Sep 2020

AAFA testifies before House committee on PRC forced labour

The situation arising out of forced labour in China's Xinjiang Uyghur ...

Land allotted for 2 textile units in Vietnam park

Textiles | On 21st Sep 2020

Land allotted for 2 textile units in Vietnam park

Land was recently handed over to Top Textiles Limited and Jehong...

Interviews View All

Top executives, Textile Industry

Top executives
Textile Industry

We will move away from mass production to production in micro-factories

Asim Dalal, Indo Count Retail Ventures

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Textile Industry, Head honchos

Textile Industry
Head honchos

Estimate loss of $8-$10 billion in turnover

Xavier Martinez,

Xavier Martinez

CADT Software & Drafting was founded in Spain in 1987 by Josep...

Rikesh Mistry,

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Nuria Estape,

Nuria Estape

Archroma is a global colour and specialty chemicals company headquartered...

Robert Brookins, Alexium International

Robert Brookins
Alexium International

Alexium International is a specialty chemical development company...

Tiasha Renganathan, Twinery Innovations by MAS

Tiasha Renganathan
Twinery Innovations by MAS

Twinery-Innovations by MAS is the innovation arm of Sri Lankan company MAS ...

Ray Baughman, University of Texas -Dallas

Ray Baughman
University of Texas -Dallas

<div>A team of scientists and researchers have discovered twistrons,...

Sweta Tantia, Tahweave & Garo

Sweta Tantia
Tahweave & Garo

Designer Sweta Tantia owns Garo, a couture indutva or ethnicwear brand,...

Ruma Devi, Gramin Vikas Evam Chetna Sansthan

Ruma Devi
Gramin Vikas Evam Chetna Sansthan

Ruma Devi is a jet-setting promoter of artisans who has empowered...

Judy Frater, Somaiya Kala Vidya

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


September 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search