Sears sells Craftsman tool brand to Stanley tools

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The end is almost near for Sears. As a last ditch effort to raise financing and kick the can down the road, Sears has sold the craftsman tool brand.

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http://www.wsj.com/articles/sears-sells-craftsman-brand-to-stanley-black-decker-1483623215

Sears Sells Craftsman Brand, to Close 150 Stores

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


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.

Today 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 said it would close 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 4.4% in early trading, while shares of Stanley rose 2.5%.

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.
 
OH MAN...I never thought they would be that stupid...its their strongest brand. The just sold the most recognized tool brand in N. America! Before anybody [censored] about Snap-on let me just say that Ive got more Snap-on than the average tool truck. Get over it...the average Joe doesnt even know what Snap on is...my Mom knows what Craftsman is

Its over for Sears.
 
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.”
 
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Perhaps, and likely, that they will bring back a lot of American manufacturing.

I stopped buying Craftsman tools when they were made in China and sold at made in USA prices.
 
Wow. What a bad idea. Going to ogle the Craftsmen tools got men into the Sears stores. If they sell Craftsmen at Walmart, no need to go to Sears.

Don't know about B&D stock but no way I'd invest in Sears.
 
Sears is dead. They have taken out huge loans using their properties as collateral. Then, they sell off the Craftsman name to raise more money. Then they close 50-200 stores annually and have done so for several years now. Basically, they are on life support, and will go the way of Montgomery Wards and Circuit City before too long.

The top brass are well aware of what is to come. The CEO PERSONALLY loaned a huge amount of money to sears. He used properties as collateral. He knows Sears is failing and is doing everything in his power to get as rich as possible on the way out by "buying" lucrative real estate for pennies on the dollar when Sears fails. .
 
I wondered about this. At least that will keep the craftsman tool brand alive, nobody will go into sears now though.
 
Originally Posted By: jacky
I like both craftsman and stanley brands


I do too. For the average DIY'er they work just fine. Yes, if I made a living with my tools, I would invest in something nicer...but used as intended (and even sometimes as not intended) they do just fine at a reasonable price. Most of my tools are Craftsman and Stanley...although I do have a socket set from Bostitch I like a lot as well.
 
I predicted they would retreat to small towns. Was just announced they will open one here. For now, I have had to go one town over to pick up what I have ordered- and did so during Christmas ... (tools, air compressor, etc). It is on the way to my bay house so not too bad - and that store is small but packed with popular selling items.
Will that work ? Depends on how small they are willing to be ... a restart? Well, Walmart made the small town model work - but that was another time and place.
 
I gave out 5 sets of Craftsman screw drivers for Christmas - 17 tools for $20 and free shipping. Made in USA.
 
But now they are junk. I used those sets for years on a commercial level and they used to be great.
The ones they offer today twist and break with supreme ease. And yes I used to be a big fan of them.
Not good...

Originally Posted By: 4WD
I gave out 5 sets of Craftsman screw drivers for Christmas - 17 tools for $20 and free shipping. Made in USA.
 
Originally Posted By: bubbatime

I stopped buying Craftsman tools when they were made in China and sold at made in USA prices.


This. And when I would break USA made stuff and only get China made junk in return under warranty.
 
Don't need you to teach me tools - I own thousands $ of them - and buy them for fortune 100 industrial company. These were for people who had next to nothing for tools. Anybody who uses $20/17 for commercial use is not grounded in reality ...

Good luck finding USA made tools the average American would pay for. In fact, when I have mentioned USA made in the past you get "what difference does that make" ? This is not a site where that means jack to all but about 10%
 
I wish Sears and K-Mart would just call it quits.

Their stores look horrible and they are just pushing off the inevitable. They're dead companies.
 
Two local ACE hardware stores are stocked FULL of Craftsman tools. Maybe even more than the nearest store. If I DID want to buy, I'd go to the ACE place, first.
 
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