New Britain's Stanley Black & Decker has agreed to buy the Craftsman brand from Sears Holdings Corp. in a deal valued at $900 million that will also expand the company's U.S. footprint and create jobs.
With an eye toward tapping into under-served markets, Stanley Black & Decker President and CEO James M. Loree said the deal for this "legendary" brand presents "a significant opportunity to grow the market by increasing the availability of Craftsman products to consumers in previously under-penetrated channels. We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online."
In preparation for continued growth of the Craftsman brand, Loree said the company will expand its manufacturing footprint in the U.S. and add jobs. The firm has upped its manufacturing headcount by 40 percent in the past three years, he said.
The deal provides Stanley Black & Decker with the rights to develop, manufacture and sell Craftsman-branded products in non-Sears Holdings retail, industrial and online sales outlets across the U.S. and in other countries.
As part of the agreement, Sears Holdings will continue to offer Craftsman-branded products, sourced from existing suppliers, through its current retail outlets via a perpetual license from Stanley Black & Decker, which will be royalty-free for the first 15 years after closing and royalty-bearing thereafter, the company said.
Today, only 10 percent of Craftsman products are sold outside of Sears Holdings, Loree said.
"It's important for our members to know that we will continue to sell Craftsman in-store and online at Kmart and Sears, and Sears Hometown," said Sears Holdings' Chairman and CEO Edward S. Lampert.
The deal is expected to close sometime this year.