Eddie Lampert, the CEO and majority shareholder of Sears, has put a price tag on how much he’s willing to pay his company to buy its Kenmore appliance brand: $400 million.
Sears Holdings, a cash-starved retailer which owns both the Sears and Kmart chains, has been shopping Kenmore and some of its other assets for years in an effort to raise additional money. Once a leader in sales of appliances, Sears has fallen on hard times due to sustained losses and falling sales. But the Kenmore brand is still widely seen as having value even if the Sears brand has been tarnished.
Lampert wrote a letter to the Sears’ board earlier this year suggesting now was the time to find a buyer for Kenmore. He said he was willing to make a bid for the brand and some of the other assets himself. Late Tuesday he released his latest letter to the Sears board, saying he was willing to pay $400 million for Kenmore and an additional $70 million to $80 million for the Sears Home Services division, also known as SHIP.
Lampert said he’s prepared to close on the deal in as little as 60 to 90 days.
“Speed and certainty here are critical,” he wrote in the letter. “We believe, therefore, that an expedited process is in the best interest of all parties involved.”
Sears declined to comment on Lampert’s letter.
Sears has lost $11.2 billion since 2010, its last profitable year. Sales have plunged 60% in that time. There were a total of 3,500 US Kmart and Sears stores when Lampert merged the two brands together in 2005. Now it has fewer than 1,000.
And the company has sold many of the remaining stores to a real estate investment company also controlled by Lampert in order to raise money. It is paying rent on those stores to that real estate company.
Sears Holdings also sold the Craftsman brand of tools to Stanley Black & Decker last year in a deal valued at $900 million.
Lampert’s letter repeated his past statements that he believes that Sears can still be turned around despite its financial problems. But he also proposed negotiating with lenders to try to extend the repayment schedule for some of Sears debt and engage in other forms of renegotiation.
“Together, we believe these transactions would contribute to a comprehensive solution to create a viable and healthy Sears and would provide greater value to all stakeholders than would be available in pursuing other alternative,” he said in the letter.
The letter did not spell out those alternatives, but Sears warned last year that there is “substantial doubt” about its ability to stay in business long term. A bankruptcy reorganization could be one of those alternatives.