Market Overview

ESL Investments Completes Acquisition of Sears Holdings' Assets


Operations to continue in the normal course; Sears and Kmart members
and customers will continue to have a seamless shopping experience

ESL Investments, Inc. ("ESL") today announced that its affiliate,
Transform Holdco LLC, has completed its acquisition of substantially all
of the go-forward retail footprint and other assets and component
businesses of Sears Holdings Corporation on a going-concern basis for a
total consideration of approximately $5.2 billion.

The new Sears (the "Company") will comprise 223 Sears and 202 Kmart
stores, along with prominent brands and operating businesses, including
Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto Centers and

Edward S. Lampert, CEO of ESL, said, "The best possible outcome has now
been realized for all stakeholders, including Sears' many associates,
Shop Your Way members, vendors and other partners. ESL looks forward to
a new era at Sears and Kmart that builds on their proud histories, while
finding new ways to innovate and grow to adapt to the forces
transforming the retail industry. We are ready for this exciting
opportunity to help return Sears to profitability and will apply
ourselves every day in pursuit of that goal."

The new Sears moves forward from the Chapter 11 process positioned for
success with:

  • A footprint of profitable retail stores, a robust digital platform and
    an integrated ecosystem of businesses that drive franchise value
  • A healthier capital structure, including a reduced debt load, that
    creates the liquidity necessary to invest in its go-forward plan
  • Initiatives to drive margin & EBITDA growth, including technology
    investments, inventory optimization and Sears Home Services
  • Significantly reduced SG&A expense
  • Shop Your Way—a sophisticated rewards, analytics and marketing
    platform with more than 20 million active members and the Shop Your
    Way Mastercard partnership with Citibank
  • Strong brand recognition and market positions in key segments:
    • #3 appliance retailer in the U.S.
    • #1 home service and direct delivery provider, including for
      leading third-party retailers
    • #1 provider of appliance and lawn & garden parts for the DIY

As of the closing of the acquisition, the new Sears had more than $400
million in excess availability on its new asset-backed credit facility,
which provides a significant runway to pay assumed liabilities, execute
go-forward initiatives, including investments in new, smaller stores to
expand the Company's reach in the hardline category, pursue renewed
marketing efforts, foster new partnerships that unlock value and invest
in the Company's unique services and delivery offerings. The new Sears
has a plan to be EBITDA positive in fiscal 2019.

Transform Holdco will ensure a seamless transition, with no disruption
to the member and customer experience and continuation of Sears' member
programs, warranties and protection agreements. Vendors and suppliers
will continue to be paid in the ordinary course for all goods and
services under agreed upon terms.

The new Sears will be led by the management team that constituted the
Office of the Chief Executive of Sears Holdings, consisting of Robert A.
Riecker, Chief Financial Officer, Leena Munjal, Chief Digital Officer,
and Greg Ladley, President, Softlines. The Company intends to conduct a
search for a Chief Executive Officer with a record of success in
managing platform businesses and effectuating large-scale dynamic

Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel, and
Moelis & Company is serving as financial advisor to ESL Investments, Inc.

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