Transform SR Brands LLC
(
doing business as
A trade name, trading name, or business name, is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is a "fictitious" business name. Registering the fictitious name w ...
Transformco, referred to as "New Sears") is an American privately held company formed on February 11, 2019, to acquire some of the assets of
Sears Holdings Corporation
Sears Holdings Corporation was an American holding company headquartered in Hoffman Estates, Illinois. It was the parent company of the chain stores Kmart and Sears and was founded after the former purchased the latter in 2005. It was the 20th-l ...
. The new company is owned by
ESL Investments
ESL Investments is a privately owned hedge fund based in Greenwich, Connecticut
Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachuset ...
. Following the Chapter 11 bankruptcy filing of Sears Holdings on October 15, 2018, Transformco purchased the surviving assets owned by Sears Holdings for $5.2 billion.
On June 3, 2019, it was announced that Transformco would acquire
Sears Hometown and Outlet Stores
Sears Hometown and Outlet Stores Inc. was an American retail company that sold home appliances, lawn and garden equipment, apparel, mattresses, sporting goods, and tools. The company had four subsidiary store formats: Sears Hometown, Sears Outle ...
. As per deal, Sears Hometown might need to divest its Sears Outlet division to gain approval.
History
Fall of Sears Holdings
On November 17, 2004, the management of Kmart Holding Corporation announced its intention to purchase Sears, Roebuck and Co. under a new corporation. Kmart previously emerged from
Chapter 11 bankruptcy protection
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...
on May 6, 2003. The new corporation became known as Sears Holdings Corporation, simply known as
Sears Holdings
Sears Holdings Corporation was an American holding company headquartered in Hoffman Estates, Illinois. It was the parent company of the chain stores Kmart and Sears and was founded after the former purchased the latter in 2005. It was the 20th-l ...
. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands. The merger of Kmart and Sears closed on March 24, 2005, following affirmative shareholder votes of both companies. The result of the merger was Kmart and parent Kmart Holding Corporation and Sears became subsidiaries of the new Sears Holdings Corporation. Sears Holdings then operated Sears and Kmart stores. The company continued to market products under brands held by both companies. The merger was completed on March 24, 2005, after receiving regulatory approval from the government and approval by shareholders of both companies. The combined company had approximately 3,500 stores at the time of the merger.
Eddie Lampert led the company for the next thirteen years. (See
Sears Holdings#History for more detailed history of the intervening years.)
On October 10, 2018, it was reported that Sears Holdings had engaged advisors regarding an imminent bankruptcy filing.
The company filed for
Chapter 11 bankruptcy protection
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...
on October 15, 2018, in New York; the same day that a $134 million debt payment was due.
On October 15, 2018, Sears Holdings announced that it would close 142 stores, including 63 Kmart stores and 79 Sears stores.
Sears Holdings' bankruptcy also marked Kmart's second bankruptcy in 16 years. On November 8, 2018, Sears Holdings announced it would close an additional 40 stores, including 11 Kmart and 29 Sears stores. On November 23, 2018, Sears Holdings released a list of 505 stores, including 239 Kmart and 266 Sears stores, that are for sale in the bankruptcy process while all others are currently holding liquidation sales. However, the stores for sale are not guaranteed to be protected from liquidation in the future. On December 28, 2018, Sears Holdings announced it would close 80 additional stores, including 37 Kmart and 43 Sears stores.
In a proposal announced in early January, Sears Holdings plans only to keep 202 Kmart stores along with 223 Sears stores open, assuming that it survives the bankruptcy process. Most of the proposed locations are in highly populated coastal regions.
On January 15, 2019, when it had appeared that Sears Holdings was preparing to file for
Chapter 7 liquidation, the bankruptcy court judge ordered the company to return to negotiation table and work out a new deal with
Eddie Lampert
Edward Scott Lampert (born July 19, 1962) is an American billionaire businessman. He is the former CEO and chairman of Sears Holdings (SHLD), founder of Transform Holdco LLC, and founder, chairman, and CEO of ESL Investments. Until May 2007, he ...
to prevent the liquidation from occurring. A new deal was struck at the last minute that would keep up to 400 Sears and Kmart stores operating.
On January 19, 2019, Sears Holdings officially announced that they had won the auction, and that some of the then existing stores were to remain open.
On January 24, 2019, a group of
unsecured creditor
An unsecured creditor is a creditor other than a preferential creditor that does not have the benefit of any security interests in the assets of the debtor.
In the event of the bankruptcy of the debtor, the unsecured creditors usually obtain a ''p ...
s, which included
Simon Property Group
Simon Property Group, Inc. is an American real estate investment trust that invests in shopping malls, outlet centers, and community/lifestyle centers. It is the largest owner of shopping malls in the United States and is headquartered in Indian ...
, filed a motion with the bankruptcy court to overturn the deal Sears Holdings had recently made with Lampert claiming that Lampert had been "engaged in serial asset stripping" of the company at the expense of suppliers and landlords. The creditors had requested that the bankruptcy court rule to have the company be liquidated instead of being reorganized so that the creditors would be able to recover more money that was still owed to them.
On January 28, the federal government-operated
Pension Benefit Guaranty Corporation
The Pension Benefit Guaranty Corporation (PBGC) is a United States federally chartered corporation created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private defined b ...
announced that they were not in favor of the current Sears Holding agreement with Lampert since that agreement would create a $1.7 billion funding gap in the employee pension fund that would require the American tax-payers to cover the shortfall.
In papers filed on February 1 with the bankruptcy court, ESL "outlined plans to close three Kmart stores per month in 2019" if the court decides to accept ESL's purchase bid.
In February 2019, it was announced that a U.S. bankruptcy judge approved the sale of the most lucrative part of Sears Holdings to Edward Lampert allowing the surviving part of the company that operates both Sears and Kmart to remain in business at the expense of suppliers, landlords, employees, pensioners, the U.S. government, and other creditors. Kmart would have 202 locations after the sale is completed.
Birth of Transformco
In February 2019, the company finalized the acquisition of 425 stores (223 Sears and 202 Kmart) from Sears Holdings for $5.2 billion. Stores not purchased by Transformco were immediately liquidated.
During bankruptcy proceeding of Sears Holdings, ESL, the parent company of both "old Sears" and "new Sears", told the court that it had "plans to close three Kmart stores per month in 2019" if the court decides to accept ESL's purchase bid.
[
]
In June 2019, Sears customers discovered that they were having a hard time getting warranties honored for items previously purchased from Sears.
New store closures
On August 6, 2019, it was announced that Transformco will be closing 26 stores, including 5 Kmarts and 21 Sears stores, in October. these closing would result in approximately 380 remaining stores.
On August 31, 2019, It was announced that Transformco would close an additional 92 stores, including 77 Kmarts and 15 Sears stores, by the end of 2019.
On November 7, 2019, it was announced that Transformco would close an additional 96 stores, including 45 Kmarts and 51 Sears stores, February 2020, leaving 70 Kmart stores in 19 states, Guam, Puerto Rico, and United States Virgin Islands, and 123 Sears stores, respectively.
At least one source reported in November 2019 that Transformco would have a total of 182 full Sears and Kmart stores remaining after the 96 announced stores were closed by February 2020.
In December 2019, Transformco sold the
DieHard brand to
Advance Auto Parts
Advance Auto Parts, Inc. (Advance) is an American automotive aftermarket parts provider. Headquartered in Raleigh, North Carolina, it serves both professional installer and do it yourself (DIY) customers. As of July 13, 2019, Advance operated ...
for $200 million.
Under this agreement, Sears and Kmart can continue to sell DieHard branded batteries through their stores while Advance Auto Parts has exclusive rights to the DieHard brand in the automotive and vehicular supplies and service industries.
On February 6, 2020, Transformco announced an additional closure of 15 Kmarts and 26 Sears, effective to close around April 2020. Throughout June and July 2020, Sears' job website has indicated that over twenty more stores are closing.
In December 2021, Transformco announced its plans to sell the Sears headquarters in Hoffman Estates. In 2022, the owner of Sears confirmed that the last full-line Sears store in Pennsylvania, in Abington Township, Montgomery County, is closing. On January 21, 2022, the last remaining Searstown in Fort Lauderdale, Florida abruptly closed at the end of the day without any prior announcement or liquidation.
On August 29, 2022, it was announced that the Sears at
Newburgh Mall
Newburgh Mall is a regional shopping center located on New York State Route 300, NY 300 in the Newburgh (town), New York, Town of Newburgh, New York (state), New York, near where Interstate 87 (New York), Interstate 87 (the New York State Thruway) ...
would be closing in fall of 2022 marking the end of era after 43 years as the last original anchor store in the mall as well as the last Sears department store in
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
. The closing date for this store was announced 2 days later on August 31, 2022 in a Facebook post with the final day of operation being Sunday, October 16, 2022.
On September 22, 2022, it was announced that Sears would be closing at the
Valley Mall in
Union Gap, Washington
Union Gap is a city in Yakima County, Washington, United States. As of the 2020 census, the city population was 6,568. Union Gap has become the retail hub for the entire Yakima Valley as a result of Valley Mall and other thriving businesses be ...
by Sunday, November 20, 2022. Once this store closes, the last full line Sears department in
Washington
Washington commonly refers to:
* Washington (state), United States
* Washington, D.C., the capital of the United States
** A metonym for the federal government of the United States
** Washington metropolitan area, the metropolitan area centered on ...
will be the store at
Westfield Southcenter
Westfield Southcenter, formerly known as Southcenter Mall, is a shopping mall located in Tukwila, Washington, United States. Owned by Unibail-Rodamco-Westfield, it is the largest shopping center in Washington state and the Pacific Northwest. The ...
in
Tukwila.
On September 23, 2022, it was announced that
Sears
Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began a ...
would be closing at
Burbank Town Center
Burbank Town Center (formerly Media City Center) is a large shopping mall and complex that opened in August 1991 on Magnolia Boulevard in Burbank, California, with three levels of interior shopping anchored by Macy's, Burlington, Sears, and RO ...
in
Burbank, California
Burbank is a city in the southeastern end of the San Fernando Valley in Los Angeles County, California, United States. Located northwest of downtown Los Angeles, Burbank has a population of 107,337. The city was named after David Burbank, w ...
, the last original anchor from opening day of 1991. This was also the last store in the
Greater Los Angeles Area
Greater Los Angeles is the second-largest metropolitan region in the United States with a population of 18.5 million in 2021, encompassing five counties in Southern California extending from Ventura County in the west to San Bernardino Coun ...
to be connected to a mall.
On October 15, 2022, it was announced that the only remaining Kmart store in
Puerto Rico
Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and Unincorporated ...
at the
Plaza Las Americas
A town square (or square, plaza, public square, city square, urban square, or ''piazza'') is an open public space, commonly found in the heart of a traditional town but not necessarily a true geometric square, used for community gatherings. ...
would be closed by the end of that month.
On December 12, 2022 it was announced that the last Sears store in the state of
Maryland
Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean to ...
at the
Francis Scott Key Mall
Francis Scott Key Mall is an enclosed shopping mall in Frederick, Maryland. Opened in 1978, it is anchored by JCPenney, Macy's, Value City Furniture, DSW, Ethan Allen, Barnes & Noble, and Dick's Sporting Goods.
History
Original anchors at Franc ...
in
Frederick, Maryland
Frederick is a city in and the county seat of Frederick County, Maryland. It is part of the Baltimore–Washington Metropolitan Area. Frederick has long been an important crossroads, located at the intersection of a major north–south Native ...
would close. One day later an article came out saying that the store was to be closed by Sunday, January 15th, 2023.
Sears Hometown Stores
On June 3, 2019, it was announced that Transformco would acquire
Sears Hometown and Outlet Stores
Sears Hometown and Outlet Stores Inc. was an American retail company that sold home appliances, lawn and garden equipment, apparel, mattresses, sporting goods, and tools. The company had four subsidiary store formats: Sears Hometown, Sears Outle ...
. As a part of the deal, Sears Hometown may need to divest its Sears Outlet division to gain regulatory approval.
At the time announcement, Sears Hometown and Outlet Stores had 491 Hometown stores and 126 Outlet stores in 49 states, Puerto Rico and Bermuda.
98% of the Hometown stores are owner operated franchise operations.
On October 23, 2019, Sears Hometown and Outlet Stores completed its sale of its Sears Outlet division to
Franchise Group, Inc while Transformco completed the acquisition of the remainder of Sears Hometown at the end of the same business day.
Sears Hometown had 414 stores at the time of its acquisition by Transformco in October 2019.
In January 2020, ''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' reported that Sears Hometown franchisees were having trouble getting needed inventory from Transformco and also being penalized if they tried to match prices on products sold on Sears.com.
Chain Store Age estimated in May 2022 that approximately 100 Hometown stores were in the process of closing.
In December 2022, Sears Hometown Stores, Inc., filed for Chapter 11 bankruptcy and plans to liquidate the inventory at all of its 121 stores. In the bankruptcy proceedings, Eddie Lampert is listd as a 37.75% owner of Sears Hometown The website for Sears Hometown Stores and for Sears Home Appliance Showroom was deactivated shortly after the bankruptcy announcement.
Subsidiaries
Current
Kmart division
*
Kmart
Kmart Corporation ( , doing business as Kmart and stylized as kmart) is an American retail company that owns a chain of big box department stores. The company is headquartered in Hoffman Estates, Illinois, United States.
The company was inc ...
– a chain of
discount stores
A discount store or discounter offers a retail format in which products are sold at prices that are in principle lower than an actual or supposed "full retail price". Discounters rely on bulk purchasing and efficient distribution to keep down cost ...
that are usually free-standing or located in
strip mall
A strip mall, strip center or strip plaza is a type of shopping center common in North America where the stores are arranged in a row, with a sidewalk in front. Strip malls are typically developed as a unit and have large parking lots in front. ...
s. They carry most standard department store stock as well as a limited selection of grocery items. Only 9 stores remain in the USA as of April 27, 2022, including 3 in the continental states.
Sears division
*
Sears
Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began a ...
– a chain of
department store
A department store is a retail establishment offering a wide range of consumer goods in different areas of the store, each area ("department") specializing in a product category. In modern major cities, the department store made a dramatic app ...
s that are usually located in
shopping mall
A shopping mall (or simply mall) is a North American term for a large indoor shopping center, usually anchored by department stores. The term "mall" originally meant a pedestrian promenade with shops along it (that is, the term was used to refe ...
s, with a few freestanding locations. As of August 29th, 2022 only 15 Sears Full line department store remain in operation. These stores carry traditional, middle-class priced department store items as well as an expanded appliance and tools section.
** Sears Home Services – a division of Sears that specializes in appliance repair, lawn and garden services,
HVAC
Heating, ventilation, and air conditioning (HVAC) is the use of various technologies to control the temperature, humidity, and purity of the air in an enclosed space. Its goal is to provide thermal comfort and acceptable indoor air quality. HV ...
service, as well as most in home services. It was announced in July 2020 that Transformco was exploring the "sale of its home improvement business following interest from potential suitors."
** Sears PartsDirect – a chain of lawn-and-garden equipment and appliances parts stores. Some stores, branded as Sears Parts and Repair Centers, feature a carry-in point for customers to bring merchandise in that needs to be repaired either in- or out-of- warranty.
** Sears Home & Life - a chain of stores that sells "hardline" goods such as appliances, tools, mattresses and lawn and garden equipment. These stores are free standing and are between 10,000 and 15,000 square feet in size.
* Sears Hometown - sells home appliances, lawn and garden equipment, apparel, mattresses, sporting goods, and tools. All stores in this division are individually owned and operated by independent franchisees.
** Sears Hometown Store - stores that sell Sears merchandise.
** Sears Home Appliance Showroom - Home appliance showrooms display merchandise in-stores.
Other subsidiaries
* Shop Your Way – a customer
loyalty program
A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program. Today, such programs cover most types of commerce, each having varying features and ...
shared between all subsidiaries.
* A&E Factory Service – a joint venture held by Whirlpool and Transformco that performs mobile appliance repairs.
** Monark Premium Appliances – Premium appliance showrooms for architects, builders, designers, developers, and homeowners to browse.
Former
Kmart division
* Kmart – Kmart closed down or sold these divisions:
** Big Kmart stores – chain of discount department stores that carried everything a regular Kmart carries, but emphasizes home decor, children's clothing, and more food items. The Big Kmart format has been long discontinued, but the Big Kmart signage was still common for most Kmart stores for a long time that had gotten the new Kmart logo sign before that store was eventually closed.
** KGRO – a brand of Kmart that was used exclusively in each store's Garden Shop. While at first was used for such things as KGRO garden and power equipment, it was later used as Kmart's brand of fertilizers and plant seeds.
** K-Fresh – a new format that was implemented in several Super Kmart Center locations, which extended the grocery section into a store-within-a-store model.
** mygofer – a hybrid-online retail concept launched in spring of 2009, where products are ordered ahead of time and then are either shipped to the customer or held at a local Kmart for the customer to pick up. The service was quietly discontinued in 2020 after Kmart shut down most of its stores.
Sears division
* Sears – Sears closed down or sold these divisions:
**
Sears Grand – a sub-chain of Sears stores, typically located away from shopping malls and arranged in a fashion similar to a big-box store. Many Sears Grand locations are retrofit remodels of existing Kmart or Sears stores in freestanding locations. They carry an expanded inventory, as compared with full-line Sears Department Stores, and can range from 165,000 to 210,000 square feet (15,300 to 19,500 m
2). The second to last open Sears Grand store located in Thornton, CO closed on May 2nd, 2021; the last open Sears Grand was located in Rancho Cucamonga, CA, closing on May 15th, 2021, one day sooner than originally expected.
**
Sears Hometown and Outlet Stores
Sears Hometown and Outlet Stores Inc. was an American retail company that sold home appliances, lawn and garden equipment, apparel, mattresses, sporting goods, and tools. The company had four subsidiary store formats: Sears Hometown, Sears Outle ...
– was spun off from Sears in 2012 and partially reacquired by the reorganized company in 2019. The Sears Hometown brand was retained, while the Outlet division was sold off.
*** Sears Appliance and Hardware Store – Sears appliance and hardware stores were
hardware stores
Hardware stores (in a number of countries, "shops"), sometimes known as DIY stores, sell household hardware for home improvement including: fasteners, building materials, hand tools, power tools, keys, locks, hinges, chains, plumbing suppli ...
that carry the entire line of Sears hardware and appliances. Website was terminated sometime after October 2019.
***
Sears Outlet Stores
American Freight Furniture, Mattress, Appliance, or American Freight, is an American retail company that sells furniture, mattresses and home appliances. The company's history dates to 1968, when Sears established a surplus store in Kansas City, M ...
- outlet version of Sears department stores located in various retail locations across the U.S., as well as online. Sold to
Franchise Group, Inc in October 2019.
** Innovel Solutions – Formerly known as Sears Logistics, acts as the supply chain arm for Sears Holding Company and served clients such as Costco, the Air Force Exchange, the Navy Exchange, and former Sears brand Lands' End. The company specializes in storing and moving items of all sizes, including furniture, large appliances, and even entire wine cellars. Providing 'final mile' delivery, complete installation and white glove capabilities for 'big and bulky' products across the United States and Puerto Rico. Sold to Costco on March 17, 2020
** Wally Labs – a subsidiary created when Sears Holdings purchased the rights to WallyHome sensor technology from SNUPI Technologies in 2015. The company provides technology for home safety, security, and loss prevention. Wally Labs' website had disappeared by May 2022.
** Sears Auto Centers – a subsidiary created to sell and install tires and batteries and to perform other simple car maintenance. Closed in January 2022.
Allied brands that are owned and operated by third parties
Independent companies that provide services under the Sears brand:
* Sears Credit Card - Sears credit card and Sears MasterCard is owned and operated by
Citibank
Citibank, N. A. (N. A. stands for " National Association") is the primary U.S. banking subsidiary of financial services multinational Citigroup. Citibank was founded in 1812 as the City Bank of New York, and later became First National City ...
since 2003.
* Sears Flowers - an online store that was owned and operated by
which sells Flowers, Plants and gifts for same day delivery via the Teleflora network. Their website became inactive sometime after July 2021.
* Sears Optical - a licensed brand that was owned and operated by
Luxottica
Luxottica Group S.p.A. is an Italian eyewear conglomerate and the world's largest company in the eyewear industry. It is based in Milan, Italy.
Luxottica is a vertically integrated company, which has been described as a monopoly—it designs, m ...
until February 2020. They previously provided comprehensive vision exam, contact lenses, diagnostic and medical treatment of eye diseases, urgent care, cataract and glaucoma surgery consultation/referrals, low vision treatment, and eyeglass dispensary. Luxottica terminated their relationship with Sears and closed all remaining Sears Optical locations in February 2020.
* Sears Travel - an online travel agency that was owned and operated by International Cruise & Excursion Gallery which provided online and telephone-based booking services for Sears customers through the SearsTravel.com website. Sears Travel shutdown on July 31, 2020.
Lawsuits
Sears Holdings
In March 2019, Sears Holdings sued Transform Holdco for $57.5 million it says was owed from the sale. Sears Holdings also said Transformco owes $41.3 million for credit card and cash transactions that occurred before the sale closed, as well as $16.2 million for a portion of February rent. A hearing on the matter was anticipated to take place on March 21, 2019. The lawsuit was settled in January 2020 with Transformco paying the bankrupt Sears Holdings $18.3 million. A portion went to Sears creditors.
Bangladeshi suppliers
In June 2020, a group of 19 Bangladeshi suppliers filed a $40-million lawsuit against Transformco for canceled orders that had already been shipped and stuck in American warehouses.
The lawsuit was settled out-of-court in January 2021 for $6.3-million.
References
External links
Kmart websiteSears website
{{Authority control
Companies based in Cook County, Illinois
Hoffman Estates, Illinois
American companies established in 2019
Retail companies established in 2019
2019 establishments in Illinois
Department stores of the United States
Privately held companies based in Illinois
Retail companies of the United States
Retail companies based in Illinois