Retailer Kmart Holding Corp. announced that it has agreed to sell up to 54 stores to Sears, Roebuck and Co. for U.S. $621 million, a deal that according to the companies gives Kmart much-needed cash and Sears more room to expand.
The move comes less than a month after Kmart agreed to sell as many as 24 stores to Home Depot Inc. The discount retailer has been building up its cash position since getting out of bankruptcy in May 2003.
Kmart, which closed some 600 of its 2,100 stores while under bankruptcy court protection, said it would continue to operate the 54 stores until March or April 2005.
For Sears, buying the stores will help the company get back into expansion mode after about two decades of stagnant growth. The company has been looking for ways to roll out its new Sears Grand prototype stores faster.
The stores, which Sears is opening away from the shopping malls that most of its 870 stores anchor, combine the retailer's usual assortment of appliances, tools and clothing with a small selection of food, books and magazines, and health and beauty aids.
In a statement, Julian Day, Kmart chief executive, said the retailer was "not currently in discussions regarding any additional significant store sales, although we will continue to evaluate opportunities as they arise." (Associated Press)
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