Sears seeks to reclaim Hometown brand
Sears continues its push into appliances by offering to buy full control of a chain spun off years ago
After years of shedding stores and brands, Sears is trying to reclaim full ownership of one of its long-forgotten divisions.
Sears Hometown and Outlet Stores said Monday it had received an offer from a company affiliated with the hedge fund controlled by the former Sears CEO Edward Lampert, to buy up all remaining Sears Hometown stock not already owned by the fund.
Sears Hometown and Outlet Stores said it rejected that offer but is continuing to discuss potential transactions with Transform Holdco, the company that Lampert’s ESL created to buy Sears out of bankruptcy earlier this year.
The offer comes as Sears has outlined a post-bankruptcy strategy that emphasizes big-ticket home purchases like appliances.
ESL is already the largest shareholder in Sears Hometown and Outlet Stores with 58.8 percent of its stock as of Dec. 6, according to a regulatory filing. The retailer sells appliances, hardware, tools and lawn and garden equipment under the Sears Hometown, Sears Hardware, Sears Home Appliance Showroom and Sears Outlet brands.
Transform Holdco offered $2.25 per share, which it said was a 23.6 percent above the price over the five days leading up to its offer.
Reuniting the brands under common ownership “would help stabilize the Sears Hometown and Outlet Store business in the interest of all its stakeholders and enhance efficiencies of scale, deepen partnerships with vendors and offer an even more convenient shopping experience for members and customers,” Transform Holdco said in an emailed statement on Monday.
A special committee of Sears Hometown and Outlet Stores’ board reviewed the proposal, received Friday, and determined it was not in the best interests of unaffiliated stockholders, the company said Monday.
While Sears Hometown and Outlet Stores split from Sears Holdings in 2012, it has continued to rely on merchandise and services from its former parent company. Although it was not involved in Sears’ bankruptcy last year, the associated bad publicity and problems getting inventory still hurt sales, Sears Hometown and Outlet stores said last month.
The company identified $6.8 million worth of negative impacts “directly associated with the Sears Holdings bankruptcy filing in the fourth quarter of 2018. Sales at stores open at least a year declined 8.5 percent compared with the same quarter in 2017.
