A number of companies including Stanley Black & Decker, Hong Kong-based Techtronic Industries, Bain Capital-owned Apex Tool Group and Stockholm-based Husqvarna are interested in bidding on Sears Holding Corp.’s Craftsman tools unit, sources have told Bloomberg.
Final bids, which could value the iconic Craftsman brand at some $2 billion, are due at the end of the month, according to sources.
In May Sears said it had retained Citigroup Global Markets and LionTree Advisors to explore ways to develop its Kenmore, Craftsman and DieHard and Sears Home Services businesses, which have remained strong even as the company has stumbled.
Even as CEO Edward Lampert reiterated his company's strengths and forward movement in a blog post blasting rumors that Sears Holding Corp.’s Kmart business was liquidating, the company was also making moves that are destined to diminish what’s left of its once robust brand.
The prospect of the unloading of Craftsman, one of Sears’s remaining fortes — while it could bring in much-needed cash to help the retailer survive the holiday shopping season — is just another sign of its decay and its impending disappearance from the retail landscape.
Craftsman is among the best known American brands ever — its trademark was first registered by Sears in 1927 — and remains a favorite among weekend tinkerers and serious grease monkeys alike. Although it has remained one of Sears’ best-selling categories, sales have slipped of late and the company is already selling the tools through third-party retailers.
Sears stock surged as much as 20% on Tuesday following the news. But removing Craftsman from Sears could accelerate what already appears to be a downward spiral.
In August, Sears Holdings posted Q2 same-store sales declines of 3.3% at Kmart stores and 7% at Sears stores. Revenue fell 8.8% to $5.66 billion in what Lampert called “a challenging competitive environment.” At that time, the company said it will receive $300 million of additional debt financing secured by a junior lien against inventory, receivables and other working capital from Lampert’s ESL Investments, Inc. hedge fund.