An analyst speculated that Lowe's or Home Depot could emerge as a viable rival to Kmart Holding Corp. in its bid to acquire Sears Roebuck and Co.
The home-improvement chains covet Sears' proprietary brands, primarily Craftsman tools and Kenmore appliances, and could jettison Sears' "softer side," said Craig R. Johnson, president of Customer Growth Partners, a New Canaan, CT, U.S.-based consulting firm.
Though department-store companies such as May and Federated could make a play for Sears, a home-improvement retailer makes a more compelling case, Mr. Johnson said. "Whether it's Home Depot that wants to solidify its strong position, or Lowe's seeking to jump from No. 5 to No. 2," the idea is plausible, he said.
Both retailers have the necessary market capitalization and financial wherewithal to make a play for Sears, which leads the market in home-appliance sales with 37.6 percent of the U.S. $36 billion market in 2003. Sears sells the country's top six appliance brands. In 2003, Lowe's held a 14.1-percent market share and Home Depot followed with a 6.2-percent market share. Sears' market share has slipped from 41 percent in 2001.
A home-improvement retailer would likely sell or spin off Sears' apparel and other "soft lines" businesses, Mr. Johnson said.
If Kmart remains the winning bidder, Sears' top executives stand to win big. CEO Alan Lacy is set to receive a 50-percent increase in salary to at least $1.5 million from $1 million last year, as well as stock and stock options in the combined Kmart-Sears company, Sears Holdings Corp. (Chicago Sun Times)
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