Hoffman Estates, IL, September 30—Sears said it completed the planned acquisition of 50 stores from Kmart, agreeing to pay $575.9 million in cash for leasehold interests or buy the properties outright.
Sears said it has already paid about 30 percent, or $172 million, of the total purchase price, and will pay the remaining balance when it takes possession of the stores in April.
Most of the stores are expected to be converted into Sears locations by the fourth quarter of 2005, the company said.
Sears, whose stores are traditionally located in shopping malls, originally planned to buy 51 Kmart locations and also said it would sublease six stores from Wal-Mart as part of its plan to develop an off-mall presence.
The company is developing a new mid-sized store concept for the acquired freestanding sites, which are located primarily in Califronia, Florida and New Jersey. The stores add to about 1,000 existing Sears mall-based department stores in the United States.
Kmart, which emerged from bankruptcy in May 2003, began a rapid sell-off of its stores earlier this year in an effort to regain a financial foothold after drowning in the wake of rival discounters Wal-Mart and Target Corp. Kmart last month finalized the sale of 18 locations to home-improvement retailer Home Depot Inc. for about $271 million.
