The truth is that, for years, Sears has been suffering.
In a constant effort to return the company to where it once was, CEO Eddie Lampert had sold real estate and other assets with the hopes that the company could bounce back. But, according to reports, over the last eight years Sears has lost over $9 billion dollars, and the company’s shares lost an approximate value of 60% last year. Sears had been trying to figure out how to get money out of some of its popular name brands, such as Die Hard and Kenmore. Recently, they decided to cash in on the Craftsman brand, selling it to Black & Decker for $900 million.
This money will give Sears some breathing room, and will be a huge jump in keeping operations going at a steady pace. But, some analysts still believe that even with this huge sale Sears will still have a lot of work to do to get out of the hole in the next few years. For example, one analyst from Moody’s Investor Service, Christina Boni, says that in order for the company to get through 2017 securely, they will need to make around $1.5 billion this year. Minus the money they will get from selling Craftsman, only $600 million to go.
The move seems okay monetarily, but in the end it appears to be a better deal for Stanley Black & Decker. With Sears losing more and more customers as the days go by, they are highly dependent on what they do have going for them, one of these things being popular names on their shelves like Craftsman. Stanley Black & Decker is already a household name across America, and now they will have even more marketing oomph by getting to flaunt the Craftsman branded products.
After almost an entire century, many can’t believe that the era of Sears and the Craftsman brand is coming to an end. Signs of Sears going under has been ongoing news in the public for years now, notably because of all the closings of Kmart stores in the United States. For example, in 2014 and 2015 combined, there were over 200 Kmart locations that closed down for good, leaving thousands of employees out of work. Recently, Sears announced that they will be closing even more stores soon, 151 according to the Baltimore Sun. Among the ones to close will be 41 actual Sears locations, and another 109 Kmart’s.
The name Craftsman is one that is iconic in the eyes of dedicated customers who buy product after product faithfully. Sears has owned the brand name for over 90 years, and now the next generation of buyers will be drawn away from the stores even more because the exclusivity of the brand has now been passed over to Stanley Black & Decker. Tools and other products that bear the Craftsman name have up to this point been sold primarily in Sears, being that only about 10% of Craftsman products were actually for sale outside of the store’s walls. The confirmation of the deal was announced on January 5th, 2017. – by Limus Woods
Bennett, J. Sears to Sell Iconic Craftsman Brand after 90 Years. Popular Mechanics. Retrieved from http://www.popularmechanics.com/home/tools/a24624/sears-to-sell-the-craftsman-brand/
Mirabella, L. Sears Sells Craftsman Brand to Stanley Black & Decker for $900 Million. Baltimore Sun. Retrieved from http://www.baltimoresun.com/business/bs-bz-stanley-craftsman-20170105-story.html