Kmart Buys Sears in a Surprise Move 

JASON RZUCIDLO / AmericaJR 19nov04

Kmart Corporation (based in Troy, Michigan) has bought Sears, Roebuck & Co. (based in Hoffman Estates, Illinois). It was a deal that cost $11 billion. It was done fast, swift and quietly.

The new company is being called the Sears Holdings Corp. It will have an annual revenue of $55 billion making it the nation's #3 retailer. There will be a combined total of about 3,500 stores.

Before the merger took place, Kmart was the nation's 14th largest retailer. Meanwhile, Sears was ranked number six. The number one discount retailer is Wal-Mart, followed by Target. The number one department store chain is Sears, with JCPenney right behind them.

Why did the merger even happen? The idea behind the merger is to make the new company more competitive with other retailers such as Wal-Mart. They will be able to cut costs and offer the same brands at both stores.

Sears is known for brands such as Kenmore appliances, Craftsman tools and Lands' End fashion. Kmart has some strong brands as well. They are Martha Stewart Everyday, Joe Boxer, Thalia Sodi, Jaclyn Smith, Route 66 and Sesame Street. You will now see Kmart brands sold in Sears locations and Sears brands sold in Kmart stores.

Recently, Michigan Governor Jennifer Granholm has been trying to keep the Kmart headquarters in our state. As stated in the merger, the new company will have it's headquarters in Hoffman Estates, Illinois. It raises some questions about what Kmart will do with it's massive Troy headquarters. They have a lot of extra space that they don't need.

AmericaJR.com was first to report that Kmart was expected to sell it's Troy headquarters. It looks like this might be the case after all.

Who's the mastermind behind the Kmart-Sears merger? A man named Edward S. Lambert. He's a 42-year-old billionaire investor. Mr. Lambert graduated from Yale University with a bachelor's degree in economics. He's worth an estimated $1.5 billion.

The private investor owns 53% of Kmart and 15% of Sears. He's gained fame for buying shares of struggling companies and then turning them around to profitablility. He has been compared to Warren Buffet.

If your Kmart store is performing poorly, you can expect it to be converted to a Sears store. It also depends on how close it is located to a shopping center that has a Sears. If your Kmart store is performing well, you will likely remain a Kmart but stock products from Sears. If your a Sears store, your likely to stay a Sears.

The merger still has to be approved by a boatload of people. It needs to get the green light from shareholders of both Sears and Kmart, regulatory approvals and others. However, it is expected to pass and be completed by next March.

The history of Sears, Roebuck & Co.

• 1866 - Richard W. Sears founds the R.W. Sears Watch Co. in Minneapolis.
• 1887 - Moves the company to Chicago. Employs Alvah C. Roebuck.
• 1893 - Company is renamed Sears, Roebuck & Co. They offer mail orders at low prices.
• 1896 - Sears, Roebuck & Co. first general catalog is released.
• 1906 - Opens a 3 million sq. ft mail order plant in Chicago, the largest in the world. Also opens one in Dallas.
• 1908 - Richard Sears retires as president of the Sears, Roebuck & Co.
• 1916 - Company creates savings and profit sharing programs for it's employees.
• 1925 - First retail store opens on Chicago's west side.
• 1927 - Sears launches the Craftsman tools and Kenmore appliances brands.
• 1931 - Sears established the Allstate Insurance Co.
• 1945 - For the first time ever, sales at Sears exceed $1 billion.
• 1973 - Sears moves it headquarters into the Sears tower, which was the tallest building at the time.
• 1985 - Sears launches the Discover credit card.
• 1995 - Sears moves it headquarters again to Hoffman Estates, Illinois.
• 1997 - Opens Great Indoors stores.
• 2002 - Sears acquires the Lands' End catalog.
• 2004 - Sears is bought out by Kmart, a deal worth $11 billion to form the Sears Holdings Corp.

The history of the Kmart Corporation

• 1899 - Sebastian S. Kresge founds the S.S. Kresge Co.
• 1912 - The company is incorporated. It has 85 stores with sales of $10.325 million.
• 1918 - S.S. Kresge Co. is listed on the New York Stock Exchange.
• 1962 - The first Kmart discount store is opened in Metro Detroit. The same year, 17 other Kmart stores opened for business.
• 1966 - The founder Sevastian S. Kresge passes away at 99 years old.
• 1977 - The name of the company was changed from S.S. Kresge Co. to Kmart Corp.
• 1981 - The 2,000th Kmart store is open for business. By the end of 1981, there were 2,055 stores in the U.S., Canada and Puerto Rico.
• 1987 - Kmart sells its Kresge stores to McCrory Corp. Kmart introduces Martha Stewart as a spokeswoman and consultant to the retailer.
• 1997 - Martha Stewart launches her everyday line of bed and bath fashions, and paint in Kmart stores.
• 2002 - Kmart Corp. files for Chapter 11 bankruptcy. The retailer closes 600 stores and lays off 57,000 employees.
• 2003 - Kmart Corp. comes out of bankruptcy and is renamed Kmart Holding Corp.
• 2004 - Kmart buys Sears, Roebuck & Co. for $11 billion.

source: http://geocities.com/americajr/news/news111904.html 26nov04