Sears bids Hometown, Outlet, hardware stores goodbye in spinoff
Sears Holdings Corp., one of several struggling big-box retailers, is splitting off more than 1,000 Hometown, Outlet and hardware stores as a separate, public company.
The spinoff will affect 1,238 stores total. Sears Hometown and Outlet Stores, Inc. will trade under the “SHOS†symbol on Nasdaq. The new company will sell home appliances, hardware, tools and lawn and garden equipment, according to a filing with the Securities and Exchange Commission.
The Hometown stores are mostly independently owned, based in smaller communities and often offering proprietary Sears products such as Kenmore, Craftsman and DieHard. The Outlet stores – 122 of them as of late April – feature deeply discounted products that are “new, one-of-a-kind, out-of-carton, discontinued, obsolete, used, reconditioned, overstocked and scratched and dented.â€
The split from Sears Holdings comes with its own set of risks. SHOS will continue to rely on its originator for “most key products and services,†according to the regulatory filing. It is concerned about its “ability to offer merchandise and services desirable to our customers and compete effectively in the highly competitive home appliance and hardware industries.â€
The “adverse worldwide and national economic conditions†are also a cause for worry.
Sears is an older brand with stores and merchandise that, according to analysts, are not aging well. The company has tried experimenting with updates and streamlining, especially after a revenue slump over the holidays continued several years of sales declines.
In December, when Sears and Kmart said they would close more than 100 stores, retail analyst Brian Sozzi called the company’s trajectory “a slow deathwatch.†For years, chairman and majority stakeholder Edward Lampert has steadily sold off pieces of Sears’ real estate collection.
The company is suffering many of the same stresses as other retailers with large-format stores, including Best Buy and J.C. Penney — high competition, pricing pressure and a changing consumer base.
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