Sears to Spin Off Hometown, Outlet Stores

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Sears to spin off Hometown, outlet storesNEW YORK -- Sears is moving forward with plans to spin off its Hometown and Outlet stores as well as some hardware stores into a separate publicly traded company.

Sears Holdings Corp. (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.

In its filing with the Securities and Exchange Commission, Sears Hometown & Outlet Stores Inc. said that it expects to raise $346.5 million through a rights offering. In connection with the deal and prior to the separation, it will take out an asset-backed line of credit from which it will draw $75 million to $100 million to fund a cash dividend. That would bring the total proceeds to be paid to Sears Holdings to as much as $446.5 million and is in line with its previously stated goal of raising between $400 million and $500 million.

The news sent the company's stock up $2.94, or 5.7 percent, to close at $54.36 Monday.

Sears Chairman Edward Lampert's ESL Investments Inc. 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, 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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Sekinu2

sorry that wasnt my fault it kept saying the system was down try again so I did and it never showed but it now shows each retry it told me to do so please dont blast me as this was a web site issue I promise I am not an idiot lol.

August 29 2012 at 9:53 PM Report abuse rate up rate down Reply
Sekinu2

Heres an idea. get your prices inline with other competitors. Go back to lifetime warranty on craftsman tools and get rid of the replacement line or crappy Irwin stuff.

August 29 2012 at 9:52 PM Report abuse rate up rate down Reply
Sekinu2

Heres an idea. get your prices inline with other competitors. Go back to lifetime warranty on craftsman tools and get rid of the replacement line or crappy Irwin stuff.

August 29 2012 at 9:11 PM Report abuse rate up rate down Reply
Sekinu2

Heres an idea. get your prices inline with other competitors. Go back to lifetime warranty on craftsman tools and get rid of the replacement line or crappy Irwin stuff.

August 29 2012 at 9:11 PM Report abuse rate up rate down Reply
Sekinu2

Heres an idea. get your prices inline with other competitors. Go back to lifetime warranty on craftsman tools and get rid of the replacement line or crappy Irwin stuff.

August 29 2012 at 9:11 PM Report abuse rate up rate down Reply
Sekinu2

Heres an idea. get your prices inline with other competitors. Go back to lifetime warranty on craftsman tools and get rid of the replacement line or crappy Irwin stuff.

August 29 2012 at 9:11 PM Report abuse rate up rate down Reply
moneemgr

Sears has been in a death spiral for years. The traffic in the stores is invisible just as in the Home Depot stores. The Kmart deal was and is a fiasco for everybody but for Eddie and his team and now they want the public to put good money into a sure fire losing proposition???.

And, let's not look at their sales and profit numbers too closely.. Again, for instance just like Home Depot, the sales are inflated by having raised prices across the board. If you paid $3.99 in 2009 that same item now will come in now at $5.99- $6.99. All the losing retailers have done the same. To me that is a flat to declining trend line at best that simply cannot survive. Then again, it would be time for yet another Wall Street maneuver like this; wouldn't it?

In a faltering economy, irrespective of how financial numbers are dressed up, this one is to be avoided.

August 29 2012 at 6:00 PM Report abuse rate up rate down Reply
podcat1023

I am 68 and grew up with Sears. Remember the hugh one in Porter Square Somerville, MA where my Mother took me to buy our refrigerator among other thigns. Its history to me and I hate to see the store ever go down. Porter square in Somerville is quite the square today like Davis Square and Cenral Square in Cambridge. In my days, cheap houses and stores, now a days very expense restaurants and neighborhood to live in.

August 29 2012 at 5:49 PM Report abuse rate up rate down Reply
moneemgr

Sears has been in a death spiral for years. The traffic in the stores is invisible just as in the Home Depot stores. The Kmart deal was and is a fiasco for everybody but for Eddie and his team and now they want the public to put good money into a sure fire losing proposition???.

And, let's not look at their sales and profit numbers too closely.. Again, for instance just like Home Depot, the sales are inflated by having raised prices across the board. If you paid $3.99 in 2009 that same item now will come in now at $5.99- $6.99. All the losing retailers have done the same. To me that is a flat to declining trend line at best that simply cannot survive. Then again, it would be time for yet another Wall Street maneuver like this; wouldn't it?

In a faltering economy, irrespective of how financial numbers are dressed up, this one is to be avoided.

August 29 2012 at 5:41 PM Report abuse -1 rate up rate down Reply
moneemgr

Sears has been in a death spiral for years. The traffic in the stores is invisible just as in the Home Depot stores. The Kmart deal was and is a fiasco for everybody but the team on top and now they want the public to put good money into a sure fire losing proposition.

And, let's not look at their sales and profit numbers too closely.. Again, for instance just like Home Depot, the sales are inflated by having raised prices across the board. If you paid $3.99 in 2009 that same item now will come in now at $5.99- $6.99. All the losing retailers have done the same. To me that is a flat to declining trend line at best that simply cannot survive. Then again, it would be time for yet another Wall Street maneuver like this; wouldn't it?

In a faltering economy, irrespective of how financial numbers are dressed up, this one is to be avoided.

August 29 2012 at 5:36 PM Report abuse -1 rate up rate down Reply