Sears is considering selling its popular Kenmore appliance brand and other divisions after the hedge fund run by CEO Edward Lampert expressed interest in buying them and breaking up the company.
Sears’ board is beginning a formal process to explore the sale of three pieces of the business Lampert’s ESL Investments expressed interest in acquiring — Kenmore, the home improvement business of the Sears Home Services Division, and the Parts Direct business of Sears Home Services, the retailer said Monday.
Sears Holdings has been exploring alternatives for those businesses — as well as the Craftsman tools and DieHard battery brands — for nearly two years, saying it believes they have room to grow by expanding their reach beyond Sears.
But after failing to find a buyer for assets other than Craftsman, ESL told Sears in a letter last month it should “aggressively pursue divestiture” of all or some of those businesses.
ESL also had offered to buy certain Sears real estate assets, including debt, and continue to lease the properties to Sears or other entities.
Sears’ board has established a committee to evaluate ESL Investments’ proposal and seek other offers for Kenmore and the other divisions, the retailer said.
Sears has racked up more than $10.8 billion in losses over the past seven years, and any sales would give it a new source of funds as it works to restructure and slash costs. In the letter last month, ESL valued the Parts Direct and home improvement division at $500 million.
It did not provide a valuation of the Kenmore brand but offered to submit a proposal.
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If Sears does carve out any pieces of the business it’s considering selling, they won’t be the first. Since 2015, Sears has spun off the Lands’ End brand, sold Craftsman to Stanley Black & Decker, and sold 235 stores to real estate investment trust Seritage Growth Properties, in which Lampert holds a stake and serves as chairman of the board.