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Sears Holdings Corporation

From Biocrawler, the free encyclopedia.

Sears Holdings Corporation

Type	Public (NASDAQ: SHLD (http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHLD&selected=SHLD))
Founded	Hoffman Estates, IL (2005)
Location	Hoffman Estates, IL
Key people	Edward Lampert, Chairman Alan J. Lacy, Vice Chairman and CEO Aylwin B. Lewis, President and CEO of Kmart and Sears Retail
Industry	Retail
Products	Brands such as Craftsman, Kenmore, Lands' End, Diehard, Martha Stewart Everyday, Joe Boxer, Jaclyn Smith, Sesame Street
Revenue	US$ 55 billion (combined)
Website	www.searshc.com

Sears Holdings Corporation (NASDAQ: SHLD (http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SHLD&selected=SHLD)) was formed in 2005 by the purchase of Sears, Roebuck and Company of Hoffman Estates, Illinois by Kmart of Troy, Michigan. It is the third largest retailer in the United States behind Wal-Mart and The Home Depot.

In the purchase, Kmart Corporation took the Sears name, and moved its corporate headquarters to Hoffman Estates, the former headquarters of Sears. The Kmart retailing division still operates out of Michigan.

The company operates 3,800 retail locations under the mastheads of Sears, Sears Grand, Sears Essentials, Kmart, and SuperKmart. It has announced plans to begin opening a combined mid-sized off-mall format named Sears Essentials; the first 25 such stores will open during the second quarter of 2005.

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Merger

The proposed merger was approved by the board of directors of the two companies on November 16, 2004 and announced the next morning. During a conference call to investors and other stakeholders, the company, particularly Alan J. Lacy, cited several reasons for combining forces:

Sears has begun investing in new, larger off-mall stores, called Sears Grand stores. Earlier in the year Sears had purchased dozens of current Kmart locations; the merger permits the combined company to accelerate that process.
Management believes that the combined company can be of greater value to its stockholders as an operating company than as sources of liquidating real estate assets.
Proprietary brands held by both companies (Craftsman, Kenmore, Lands' End, Diehard, Martha Stewart Everyday, Joe Boxer, Jaclyn Smith, Sesame Street) can be made more accessible to their target demographics by leveraging their combined real estate holdings. This contributes to an expected $200 million/year in revenue synergies.
At least $300 million/year in cost savings is expected annually, particularly in the supply chain and in administrative overhead.
The establishment of a shared customer-focused corporate culture between the two companies should yield improvements in revenue per unit area.

Preservation of two brands after the merger allows Sears to focus on customers who own their own homes and earn a higher income than those targeted by Kmart.

The new company will be directed by a board of directors comprised of members from the current companies: seven members will come from Kmart's board, three from Sears's. The shareholders in Kmart will receive one share in the new company. Shares of Sears stock will be converted into a combination of 55% stock (at a ratio of 1 old to ½ new share) and 45% cash (at $50/share). Stockholders will have a choice of receiving either stock or cash, subject to the pre-defined ratio.

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Diversity

Kmart received a 57% rating on the 2004 Corporate Equality Index published by the Human Rights Campaign.
Sears was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

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External links

Official website (http://www.searshc.com/)
Consumer's website for Sears (http://www.sears.com/investors)
Consumer's website for Kmart (http://www.kmartcorp.com/)
Company presentation about the merger (http://media.corporate-ir.net/media_files/IROL/63/63737/presentations/s_041117.pdf), in PDF format