Sears Spinning Off Some Stores into Separate Company

Sears Hardware
NEW YORK -- Sears is preparing to spin off its Hometown and Outlet stores as well as some hardware stores into a separate publicly traded company.

The news sent the company's stock up $2.58, or 5 percent, to $54 in premarket trading Monday.

Sears (SHLD) had signaled that it would split the companies back in February. There are a total of 1,238 Hometown, Outlet and hardware stores as of April 28, according to Sears, which is trying to turn around its business and spruce up its image. It has already closed five Hometown stores, eight hardware stores and one Outlet store.

Sears, which also owns Kmart, has looked at spinoffs and real estate sales to restore profitability and boost shareholder confidence. Aside from the separation of the Hometown, Outlet and some hardware stores, the company announced in May that it would spin off a stake in its Canada division.

Sears did not disclose Monday in the filing with the Securities and Exchange Commission how much money it expects to raise with the spin-off of the Hometown, Outlet and hardware stores. It previously said that it expected the deal to raise between $400 million and $500 million.

Sears Chairman Edward Lampert's ESL Investments will own a majority stake in the business being spun off.

For fiscal 2011, the combined Sears Hometown, hardware and Outlet businesses had net income of $33.1 million on sales of about $2.34 billion. That compares with fiscal 2010 net income of $49.8 million on sales of approximately $2.35 billion.

Sears Holdings Corp., based in Hoffman Estates, Ill., is set to report its second-quarter earnings Thursday.

The new company will be listed on the Nasdaq under the "SHOS" ticker symbol.

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Pat Violi

Do you mean that I cannot return my 50 yr. old Craftsman kitchen knife that had a lifetime guarantee?

August 14 2012 at 3:37 PM Report abuse rate up rate down Reply

It makes sense that KMart bought Sears, they ruined one corporation then needed another to destroy.

August 14 2012 at 2:40 PM Report abuse rate up rate down Reply

Next step before closing the stores forever. Haven't been in a sears store in years; last one was a 'craftsman only store' that was a pig sty. What a shame as I grew up on craftsman and buying my kids the tough skin jeans. Still have a wooden hammer from my dad which is pre-WWII and works fine. Management of kmart and sears should be proud of destroying a once great company.

August 14 2012 at 1:05 PM Report abuse rate up rate down Reply

Our final visit to sears was last month. We picked out a gas grill, paid for it, and waited to pick it up. Then they discovered they were out of stock. They offered the floor model at discount, but it was dented and missing parts, for only 10% discount. We refused, then they offered a 25 gift card to drive 30 miles to pick it up somewhere else, but not discount. Then they figured out they were out of stock there too, good thing we didn't accept. Then they store manager decided that no, they couldn't sell the floor model, because the grill may come back in stock. Then they were astounded we wanted our money back! Seriously, they expected us to forget we paid them $600 for nothing. Wasted 3 hrs of my life. Never again.

August 14 2012 at 11:00 AM Report abuse rate up rate down Reply

Regardless it's such a wonderful economy kiss kiss! :(

August 14 2012 at 9:32 AM Report abuse +1 rate up rate down Reply

Losing manufacturing cost Sears as it lost small home based machine shop customers and trades people. The clothes side suffered as people bought cheaper made goods st lower prices else where.

August 14 2012 at 9:27 AM Report abuse rate up rate down Reply

I'm happy to see that there are some people who remember that K Mart, a company who just came out of chapter 11 bankruptcy where allowed to cheaply buy Sears with other people's money. What a country.

August 14 2012 at 8:52 AM Report abuse rate up rate down Reply
1 reply to IRVING's comment

Kmart Holding Company owned Kmart Stores. When Kmart went down Kmart Holding bought Sears then changed the Main company to Sears Holding.

August 14 2012 at 9:20 AM Report abuse rate up rate down Reply

I worked for Sears way back when they were the largest retailer in the world. Management drove Sears into the ground.

August 14 2012 at 8:47 AM Report abuse +1 rate up rate down Reply
2 replies to ectullis's comment

Outsourcing eliminated the customer base that bought machine shop equipment and machine shop hardware. Cheap third world clothes hurt Sears also as other stores were able to under price Sears. Furniture and other goods were also cheaper at other stores.

Sears quality was passed up for cheap junk because consumers could not afford Sears which had better goods that were more expensive.

August 14 2012 at 9:25 AM Report abuse +1 rate up rate down Reply

That would be Regressive Democrats that drove the company under.

August 14 2012 at 3:28 PM Report abuse -1 rate up rate down Reply

They had the best paint dept. around , now you have search for the paint aisle and then find someone who knows how to operate the paint shaker. A pocket T-shirt that was $6 is now $12 on sale. Extra large sizes are nonexistent anymore. Appliance prices are better at Loew's and Home depot as well as Bestbuy for the same value there for me anymore and I was a die hard customer.

August 14 2012 at 1:05 AM Report abuse rate up rate down Reply

When Sears (about 12 years ago) offered to fix a washing machine that I had bought 14 months before for 150.00 more than it cost me when it was new, I washed my hands of them and have not darkened their door since. Good riddance to them - their customer service sucks!!!

August 13 2012 at 11:51 PM Report abuse rate up rate down Reply