Sears Announces Spinoff of Hardware and Outlet Stores

Sears Announces Spinoff of Hardware and Outlet StoresThe Chicago Tribune is reporting that, as per its April announcement of a planned spinoff of its hardware and outlet stores, Hoffman Estates-based Sears Holding Corp. filed paperwork with the Securities and Exchange Commission this week revealing its plans in further detail. As of April 28, 2012, there were 1,238 Hometown, Outlet, and hardware stores. To date, Sears has closed five Hometown stores, one Outlet store, and eight hardware stores. The Sears Hometown stores are designed to appeal to small to mid-size markets and are independently owned and operated.

Although the SEC filings did not state how much Sears expected to raise through its spinoff plans, the company had previously estimated that it would raise between $400 and $500 million from the deal. In recent years, net income from the Hometown, Outlet, and hardware stores has fallen significantly; in 2011, net income was only $33.1 billion, falling precipitously from its 2010 net income of $49.8 billion.

Bruce Johnson, who served as interim CEO of Sears from 2008 to the beginning of 2011, has agreed to serve as chief executive and president of the Sears Hometown and Outlet Stores Inc., once the spinoff occurs. Johnson most recently held the position of executive vice president of Sears’ off-mall businesses.

Spinoffs of large companies to form new, independent companies can be a complex matter that necessitates the assistance of experienced business attorneys. Along with ensuring that all required SEC filings are met, new businesses must choose the best business structure for its needs, comply with all state laws and regulations, and take steps to completely separate the business from its former parent company. If you are looking to spinoff or separate one company from another, you should contact your Naperville  business entity lawyer for assistance today.