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17-11-2004
  1
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I don't know if anyone will care much about this, but I just saw this story and posted it. I wonder if their agreement will keep MARTHA on or not?

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CHICAGO (Nov. 17) - The discounter Kmart Holding Corp. is acquiring one of the most venerable names in U.S. retailing, the department store operator Sears, Roebuck and Co., in a surprise $11 billion deal that will create the nation's third largest retailer.

The combined company under Wednesday's deal would be known as Sears Holdings Corp., but it was clearly orchestrated by Kmart chairman and Sears shareholder Edward Lampert, who will lead a new board that will be dominated by Kmart directors.

Shares of both companies surged on news of the deal. Kmart shares climbed $17.38, or 17 percent, to $118.60 on the Nasdaq Stock Market, while Sears shares soared $9.69, or 21 percent, to $54.89 on the New York Stock Exchange.

The deal marks a remarkable comeback for Kmart, a company once known for its ''Blue Light Specials,'' that scaled back its operations after seeking bankruptcy protection in 2002. Sears' roots date to the late 1800s when it offered merchandise by mail order to farmers, opened its first retail store in 1925 and eventually became the nation's biggest department store operator.

The new company is expected to have $55 billion in annual revenues and 3,500 outlets. That will mean it will trail only Wal-Mart Stores Inc. and Home Depot Inc. among the biggest U.S. retailers.

The new company plans to operate the Kmart and Sears businesses under their current brand names.

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It will be headquartered in the northwestern Chicago suburb of Hoffman Estates, where Sears has its headquarters, but will maintain a ''significant presence'' in Troy, Mich., where Kmart is based.

Under the agreement, which was unanimously approved by both companies' boards of directors, Kmart shareholders will receive one share of new Sears Holdings stock for each Kmart share. Sears, Roebuck shareholders can choose $50 in cash or half a share of Sears Holdings stock. That portion of the deal values Sears shares at $11 billion, a 10.6 percent premium over its value at Tuesday's close.

Kmart chairman Lampert will be the chairman of Sears Holdings, while Sears CEO Alan Lacy will be vice chairman and CEO of the new company. The new 10-member Sears Holdings board will have seven members from Kmart and three from Sears.

''The merger will enable us to manage the businesses of Sears and Kmart to produce a higher return than either company could achieve on its own,'' Lampert said in a news release.


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Lampert, Kmart's majority shareholder, is also Sears' largest shareholder, holding a 15 percent stake in Sears through his ESL Investments Inc.

The merger, expected to close by the end of March 2005, is subject to approval by Kmart and Sears shareholders, regulatory approvals and customary closing conditions.

Kmart filed for Chapter 11 bankruptcy protection in early 2002, leading to the closing of about 600 stores, termination of 57,000 Kmart employees and cancellation of company stock. The retailer emerged from bankruptcy in May 2003 and in March posted its first profitable quarter in three years.

Mired in a retail slump, Sears had long fallen out of favor on Wall Street after losing ground to competitors and enduring sluggish sales for years. The company last fall introduced its Sears Grand stores, which offer grocery and convenience items besides traditional Sears fare such as clothing, home appliances and tools. The concept had delivered promising results for the struggling retailer at its first three stores in metropolitan Salt Lake City, Las Vegas and Chicago, in the suburb of Gurnee.

Kmart, in recent years, has been shedding many of its underperforming stores, a strategy that has helped the once-struggling discount retailer bounce back after it emerged from bankruptcy. Kmart recently agreed to sell 50 stores to Sears for $575 million as part of that strategy.

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Kmart's earnings have been improving. On Wednesday, Kmart posted net income in the third quarter ended Oct. 27 of $553 million, or $5.45 per share, compared with a loss of $23 million, or 26 cents per share, for the same period a year ago.

Its stock price has risen nearly seven-fold to $101.22 on Tuesday from $15 a share when it emerged from bankruptcy.

In recent weeks, it appeared that Sears could be shifting toward a similar real estate strategy after the disclosure that Vornado Realty Trust, a real estate investment trust, had purchased a 4.3 percent interest in the department-store chain. That move left the impression that the value of Sears' real estate holdings may be not be fully reflected in its stock price. Since that Nov. 5 announcement, Sears' stock has jumped 25 percent. It closed at $45.20 in trading Tuesday on the New York Stock Exchange.

Company officials said the merger would help make their properties more profitable through a broader retail presence and improved operational efficiency in areas such as procurement, marketing, information technology and supply chain management.

''The combination will greatly strengthen both the Sears and Kmart franchises by accelerating the Sears off-mall growth strategy and enhancing the brand portfolio of both companies,'' Lacy said. ''This will clearly be a win for both companies' customers while significantly enhancing value for all shareholders.''

AP-NY-11-17-04 1102EST

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17-11-2004
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In a town like ours that's major news.

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17-11-2004
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ah my bf just told me about this... i don't know, i thought it was kinda weird...kmart is more like target, not a dept store,...

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17-11-2004
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Huh...well, K-mart has been suffering, what with Wally going for the lowest prices and Target aiming at a slightly more affluent market. Sears is known as a solid middle-market retailer, so they might be able to help K-mart become more competitive with Target.

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17-11-2004
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i'm a big fan of both k-mart and sears and think it's a good idea for them to band together to compete in this very tough market...i would hate to see either of them go under... i am very please with this development...


thanks sloan...

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18-11-2004
  6
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Quote:
Originally posted by softgrey@Nov 17 2004, 10:00 PM
i'm a big fan of both k-mart and sears and think it's a good idea for them to band together to compete in this very tough market...i would hate to see either of them go under... i am very please with this development...
[snapback]436667[/snapback]
i am pleased as well...i bet they could do well if they started focusing on "made in america" products. i think there's really an appetite (especially in the red states) for buying goods made in america now that people have seen how walmart delivers such low prices (by importing chinese goods)

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18-11-2004
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As a former employee of the Big K (just during high school) AND Sears (in college), I'm always happy to hear news like this. Anything that keeps them afloat is fine by me.

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18-11-2004
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what do they sell?
are they those big sort of budget supermakert stores which sells everything?

isnt that where paris and nicole went in the simple life?

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18-11-2004
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Quote:
Originally posted by Acid@Nov 18 2004, 11:30 AM
what do they sell?
are they those big sort of budget supermakert stores which sells everything?

isnt that where paris and nicole went in the simple life?
[snapback]437329[/snapback]

I think all the Kmart's in Houston, TX are gone... they sold inexpensive home decor, clothes, shoes, food (I think?)... miscellaneous things. I am sure you've heard of Walmart, it is/was very similiar. Sears has alot of hardware, lawn care products, inexpensive clothes, shoes as well as home appliances electronics, etc. Sears is where I've gotten all of my lawn equipment, alot of my tools... They also have their own hardware centers. For the type of services they provide, they are very good to their employees. They have also been known to give back to their community. They were one of the first department stores to hire minorities and have diversity in the work place, they also provide extended benefits for families of their employees (in the military) that are sent over seas.

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18-11-2004
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Quote:
Originally posted by Acid@Nov 18 2004, 12:30 PM
what do they sell?
are they those big sort of budget supermakert stores which sells everything?

isnt that where paris and nicole went in the simple life?
[snapback]437329[/snapback]
I think that Paris and Nicole went to Wal-Mart, but Kmart is very similar. Sears is a little different.

www.sears.com
www.kmart.com

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18-11-2004
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Quote:
Originally posted by Sloan@Nov 18 2004, 01:02 PM
I think that Paris and Nicole went to Wal-Mart, but Kmart is very similar. Sears is a little different.

www.sears.com
www.kmart.com

[snapback]437364[/snapback]
yeah kmart essentially was walmart before walmart got big.

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18-11-2004
  12
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Quote:
Originally posted by Sloan@Nov 18 2004, 06:02 PM
I think that Paris and Nicole went to Wal-Mart, but Kmart is very similar. Sears is a little different.

www.sears.com
www.kmart.com

[snapback]437364[/snapback]
thank you!
Sears didnt seen as cheapo as Kmart until i found this yikes

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18-11-2004
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Quote:
Originally posted by Acid@Nov 18 2004, 02:25 PM
thank you!
Sears didnt seen as cheapo as Kmart until i found this yikes

[snapback]437452[/snapback]

I know what I am getting you for a holiday present!

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18-11-2004
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Sears, Penney's, and the now-defunct Montgomer Wards have always sold crappy jewelry, along with respectable, if dull men's and women's wear, children's clothing, toys, bikes, tools, appliances.

Way back in the day, you could get anything from a raincoat to a prefab house kit through the big catalogue stores like Sears.

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25-11-2004
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I was looking at an 1800s Sears catalog in the Library: beautiful things, I would use them!

Now, it's just another store along the lines of JCPenny's or Kaufmann's.... although I did not expect a merger with K-mart. Somehow K-mart is just a step lower.

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