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As we have discussed elsewhere, department stores like Sears and Kmart are struggling to stay afloat. The parent company of both these retail brands, Sears Holdings, thus has taken a drastic step and sold one of its most popular brands, Craftsman Tools, to the competing tool maker Stanley Black & Decker.

In a complex agreement, Sears Holdings will retain a perpetual license to the brand, meaning that shoppers will still find Craftsman drills, saws, and hammers at their local Sears store. But they also will be able to find them anywhere else that Stanley Black & Decker chooses to sell them, such as Home Depot or Lowe’s. The tool company also noted that it planned to expand distribution in previously untapped channels, such as online and through industrial supply chains.

Furthermore, Stanley Black & Decker gains the rights to develop new products under the Craftsman brand. In turn, it will pay Sears Holdings $525 million immediately, another $250 million in three years, and then some undisclosed percentage of its sales revenue.

Discussion Questions:

  1. Why did Sears sell Craftsman to Stanley Black & Decker?
  2. What do you think is the future of Sears?

Source: George Anderson, Retail Wire, January 6, 2017