Sears, Roebuck and Co. (Hoffman Estates, Ill.) said it has closed the acquisition of ownership or leasehold interest in 50 stores from Kmart Holding Corp. (Troy, Mich.) for $575.9 million. Sears has paid 30 percent of the overall purchase price for these properties, with the remaining 70 percent to be paid upon its taking possession of the stores.
The newly acquired stores are located primarily in large, densely populated markets with home, family and income demographics that are attractive to Sears. Sears will take possession of the stores in spring 2005 and the majority of the stores are expected to be converted by fourth quarter 2005 to Sears nameplates. These transactions represent the largest full-line store growth in Sears history,
As part of the initial announcement on June 30, 2004, Sears also said it would acquire additional off-mall locations from Wal-Mart Corp. (Bentonville, Ark.). Sears will make lease payments to Wal-Mart under subleases for six Wal-Mart stores. These stores are located in mid-size markets.
With this transaction, Sears is doubling its total number of stores in San Diego, adding five new stores to the New Jersey market and significantly increasing the total number of stores in key markets including Florida, the Northeast and Puerto Rico.
“The completion of this transaction moves Sears another step closer to its strategic goal of growing our store base and the Sears brand off-mall,” said chairman and ceo Alan Lacy. “We look forward to an increased presence in these key markets and serving new and existing customers.”
Sears said these new stores give it stronger presence in markets where the opportunities to find sites for store growth would be limited. “Opening more doors in these strategically selected locations allows Sears to compete more effectively and operate in areas closer to the customer,” said Jerry Post, senior vp, Sears off-mall strategy. “With these new locations, plus the Sears Grand stores already in development, we will quickly open more doors and dramatically boost our off-mall retail presence in attractive markets.”
Many of these locations will give Sears the opportunity to develop its new mid-sized format — on one level, utilizing an open racetrack design with exit cashiering at the door — a common off-mall layout similar to that of Sears Grand stores.