After 90 years, struggling department store operator Sears is selling its well-known Craftsman tool brand to Stanley Black & Decker.
Sears also announced plans Thursday to close 150 stores, 10 percent of its total 1,500 stores. The closings include five Kmart stores in Texas: two in El Paso and stores in Killeen, Lufkin and Odessa.
Stanley plans to grow the brand by selling Craftsman tools in more stores outside of Sears. Today, only 10 percent of Craftsman products are sold outside Sears-owned stores. Sears will continue to sell Craftsman products at its stores, including Kmart and Sears Hometown. Sears, based in Hoffman Estates, Ill., first took control of the Craftsman brand in 1927 when it bought the trademark for $500.
Sears has been losing money for years as its revenue fell. The company posted another grim sales report Thursday, with comparable-store sales declining 12 to 13 percent during the holiday period.
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“We will continue to take actions to adjust our capital structure, meet our financial obligations and manage our business to better position Sears Holdings to create long-term value,” Sears CEO Eddie Lampert said in a statement.
Last week, the company said it received a credit facility for up to as much as $500 million to provide it with cash as it sells assets.
Stanley will pay Sears about $900 million for Craftsman, which includes $525 million when the deal closes this year, $250 million after three years and a percentage of sales for 15 years. After 15 years, Sears will start paying Stanley 3 percent of the Craftsman sales it makes.
The Craftsman deal comes about three months after Stanley agreed to buy Newell Brands’ tools business for $1.95 billion, adding lines such as Irwin and Lenox to its lineup. Stanley said at the time that it would continue to look for acquisitions after a self-imposed multiyear moratorium on deals.
Stanley, based in New Britain, Conn., makes and sells tools under several brands including Stanley, DeWalt and Black & Decker.
This report includes material from Bloomberg News.