Longtime partnership severed as part of dept. store scramble
After controlling the Craftsman name for 90 years, troubled department store operator Sears said on January 4 it will sell the famous tool brand to Stanley Black & Decker Inc.
Stanley, which makes and sells tools under the DeWalt and Black & Decker names, wants to grow the Craftsman brand by selling its products in more stores outside of Sears. Today, only 10 percent of Craftsman products are sold in other stores.
It’s been a rough start to the year for department stores in general: Macy’s announced the closure of 68 stores and 10,000 job cuts on January 4, and Neimann Marcus has discarded its plans for an IPO (initial public offering) the same week.
Sears said it will continue to sell Craftsman, including at its Kmart and Sears Hometown stores. The Hoffman Estates, Illinois-based company first took control of Craftsman in 1927 when it bought the trademark for $500.
Stanley will pay Sears about $900 million for Craftsman, which includes $525 million when the deal closes this year, $250 million after three years and a percentage of sales for 15 years. After 15 years, Sears will start paying Stanley 3 percent of the Craftsman sales it makes. Shares of Stanley, based in New Britain, Connecticut, rose $1.87 to $118.35.
Stanley said it plans to hire more workers and open a new U.S. plant to make more Craftsman products, but didn’t provide details.
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[…] Facing increased competition and decreasing market share, Sears has been restructuring its business, getting rid of unprofitable stores and recently selling its Craftsman tools line. […]