| 
Sears general overview
Banks Sign Up For $4 Billion Sears-Kmart
Merger Loan
Jed Horowitz, Dow Jones Newswires
The pending $11 billion merger
of Kmart Holding Corp. and Sears Roebuck & Co. is getting support from Wall
Street, with six investment banks agreeing to participate
in a $4 billion credit line to support the merger. J.P.
Morgan Chase & Co.Vice Chairman James Lee - whose bank
joined Citigroup Inc.and Bank of America Corp. in originally
committing to the revolving credit facility - pitched participation
in the loan to a ballroom of bankers Friday morning. The
three lead banks, known as bookrunners, are trying to parcel
out their commitments to reduce their exposure, and have
received commitments from 13 other lenders to date. " If
you want to have a relationship" with the post-merger
Sears, Lee urged the bankers, "come into this deal.
We moneylenders love it."
Bankers were told they have until Feb. 3 to decide whether
to commit to the loan facility.
Six Wall Street powerhouses have
agreed to participate in the credit, Lee said, naming
Goldman Sachs Group Inc.,
Lehman Brothers Holdings Inc., Merrill Lynch & Co.
, Morgan Stanley, Credit Suisse First Boston and Bear Stearns
Cos.. Bear signed on Friday morning, he said.
Big investment banks and commercial banks have been crossing
each other's turf in recent years. Wall Street companies
are somewhat reluctantly lending their own money to retain
corporate clients, while big commercial banks have been
trying to nab lucrative capital-raising and advisory assignments.
Lehman was Kmart's lead adviser on the merger and Morgan
Stanley represented Sears.
Most of the bankers at the pep rally Friday were from
smaller commercial banks in the U.S. and abroad.
The bankers also were briefed by Sears Chairman and Chief
Executive Alan Lacy and buyout firm billionaire Eddie Lampert,
whose hedge fund controls Kmart Holding and brought it
out of bankruptcy. Lee described the merger in glowing
terms, and portrayed Lampert and his colleagues as the
antithesis of a fast-buck buyout artist who buys companies
cheap with borrowed money and then pretties them up for
fast sale.
"They are as old-school about relationships as I
am," Lee said, trying to assure bankers who support
the deal that they would get future business from Lampert's
firm and from Sears.
Lampert discussed his commitment to the companies he buys
and his financial successes, saying Kmart's profit margins
and earnings in 2003 and 2004 beat both the bankruptcy
court's and his own company's more ambitious projections,
while they cut expenses by more than half the rate prescribed
by the bankruptcy court.
Lacy talked about Sears's growth, cost-cutting and capital
strategies. The combined retailer would be third largest
by revenue, after Wal-Mart Stores Inc.and Home Depot Inc.,
and the second largest by number of stores. On a pro-forma
basis, Sears Holdings would have had about $55 billion
in revenue last year and 3,500 stores.
Bankers who participate in the deal, which is rated investment
grade, would be paid a commitment fee of 17.5 basis points
of the amount they commit and an interest rate of LIBOR
plus 87.5 basis points (or about 3.57% at current rates)
on money drawn down from the credit line, according to
a document given bankers. (A basis point is 1/100th of
1%, or 1 percentage point.)
One California banker, who asked for anonymity, said he
left the meeting with some unanswered questions - including
what additional upfront fees bankers will get. But most
in the audience said they were reassured about the credit
quality of the deal.
Other lenders that have already committed
to the deal are commercial finance company CIT Group Inc.,
Wachovia
Corp., HSBC Holdings PLC, Royal Bank of Scotland Group
PLC (RBS.LN), Bank of Montreal , Bank of Nova Scotia and
Barclays PLC, according to Lee and other Morgan bankers.
Sears
could help Kmart
By Theresa Howard, USA TODAY
If most holiday shoppers have
any say about it, Kmart's purchase of Sears will leave
that venerable department
store chain mostly unchanged. In fact, shoppers at both
Sears and Kmart stores on Black Friday in this shopping
mecca said Kmart could learn something about service, store
cleanliness and product quality from Sears. The combining
of the two companies could be completed by spring. “ Kmart,
forget about it,” says Livio Udina, who was shopping
at Sears. “ They have people who can't even help
you. I hope Sears doesn't go down like Kmart.”
Udina, who lives in Washington
Township, and other area residents know something about
shopping. Paramus is home
to virtually every major retail chain. It boasts the ZIP
code — 07652 — that generates more retail dollars
than any other in the USA. Though Kmart and Sears stores
stand just two miles from each other on Route 17, their
brand perceptions among shoppers seem to be a million miles
apart.
Paul Brener, 65, shopping at Sears
for leather gloves, says he won't shop at Kmart because
he thinks the stores “don't
have as quality merchandise as Sears.”
Even Kmart shoppers tend to agree.
Andrea Stern, 28, shopping with her parents for donations
for an “Angel Tree” charity,
says, “We needed toys, clothing and pharmaceutical
stuff.” She concedes, “We knew we could get
more for our money, but maybe not get the best quality.”
“We like Sears,” she says. “I
don't like Kmart, but I saw something in the circular.”
What do they admire about Sears
and dislike about Kmart? “Sears
has always been very consistent,” he says. “And,
in general, Kmart has always been associated with cheapness.”
And, to some, uncleanliness. Stephanie
Hinson and her husband, Darin, of Garfield, N.J., shop
at Sears for clothes
and at Kmart for toys. But the family shops only at the
two area Kmart stores they consider the cleanest. “Some
of the other stores are really nasty, so we only shop at
selected ones,” says Stephanie, a mother of six.
Sears'
Desire for Stand-alone Stores may have Inspired Deal
By
Greg Farrell, USA TODAY
As they say in real estate, only three things matter:
location, location and location. Some observers say that's
the driving force behind Kmart's $11 billion deal to acquire
Sears. Despite struggling as a retailer in the past decade,
Sears still boasts 871 stores, 516 of which it owns.
Kmart Chairman Edward Lampert declined
to offer details about how the combination of the two retailers
would add
up to more than the sum of the parts, but it's almost certain
he'll take advantage of industry trends including:
- The skyrocketing
price of retail properties. Since taking control
of Kmart and
moving it out of bankruptcy
protection 18 months ago, Lampert has sold about
60 stores for about $900 million, a huge cash windfall.
Other
retail properties are also hot. A group of financiers
recently agreed to pay $1.2 billion for the Mervyn's
257-store chain based in Hayward, Calif.
Adding fuel to
the Sears fire: On Nov. 5, Vornado Realty Trust disclosed
that it had
acquired a 4.3% stake. "What
Vornado pointed out to the world was that people hadn't
realized there was a lot of value in Sears," says
Chris Mayer, a professor at Columbia Business School.
- Mall shopping is now different
from superstore shopping. The advent of so-called big-box
superstores,
like Lowe's and Home Depot, has differentiated casual
visits to the mall from "destination" shopping
for big-ticket items.
Sears, whose stores are almost
entirely in malls, has suffered from this change. Much
of its bread-and-butter
merchandise is "hard goods," such as Kenmore
appliances, Craftsman tools and DieHard batteries.
The success of Home Depot and
Lowe's shows that shoppers making major purchases in
these areas don't like to do
it at malls. "It appears that Sears wants to be more
in free-standing stores," says retail analyst Walter
Loeb. "This is a major change for Sears."
Ulysses Yannas, an analyst at
Buckman Buckman & Reid,
is skeptical about the real estate strategy. "If it
works out, it's going to take a long time," he says. "I
don't think the management is there to make it work. When
you haven't fixed up your merchandising, why do you move?"
But Walter Salmon, a professor
at Harvard Business School, says the deal could work
if Sears sells many of its mall
stores and moves into free-standing Kmart properties. "Some
of the Kmart stores would be better off as Sears hard-goods
stores, a good fit for major appliances," he says,
adding the merger also could cut corporate overhead.
Toddler and infant department
overview
The infants and toddlers
area was a great mix of bright and fun as well as classically styled
gear for babies and toddlers. Little Wonders, TKS and CRB had plenty of
floor space but Carter’s held the majority of the four ways as well as
a column. Gerber had the back wall space with gift sets and newborn gear while
Kid’s Play had several racks of colorful sets that blended up to the
minute denim with fashion trims and must have trinkets like hats and shoes.
Opportunities in the infant's
and toddler's department
Kid’s Play really captured the essence of
today’s baby by offering soft denim with crochet
shrugs and soft onesies as a three piece set. It is that
kind of thinking that will lead to success at and for Sears.
They, and we, need to find a way to differentiate the product
here from other retailers. Creative three piece sets, grown
up fashion thinking adapted to toddler needs and more linked
separates as opposed to one piece jumpsuits with tons of
bells and whistles on them are the way to move forward
at Sears!
A look into the department:
|
;)
;)
;)
;)
;)
;)
;)
;)
;)
;)
;)
;)
;)
;)