It was reported today that the Stanley Black & Decker company will purchase the Craftsman brand from Sears for a reported total of $900 million in current and future cash payments. This transaction should be complete sometime this year since both parties have approved the sale through their boards. An interesting twist is Sears will still be selling the Craftsman line in their stores for 15 years with no royalties and then royalties will apply going forward from there.
Craftsman Sales Outside Of Sears Stores
I was surprised to hear Craftsman brand sales only account for 10 percent of their total sales. With the ACE hardware chain picking up the Craftsman line years ago I would have thought the number would have been higher. Stanley must see that market outside of Sears being prime ground to promote the trusted Craftsman line.
Developing the Craftsman Line
Since Stanley Black & Decker will be in full control of the Craftsman brand we can fully expect the line to explode with both new and re-branded products. Stanley has many avenues to move products around under their large product umbrella. Lets look at their main lines – Stanley, B&D, Dewalt, Proto, Irwin & Lenox. Most all of these lines can have crossover or duplication of some kind. If you look at the Stanley and Dewalt like you’ll see much duplication with their hand tools and accessories such as tapes. We can assume many of these products could be directly re-branded or tweaked a bit to be sold under the Craftsman line. The Craftsman line has some long proven years of brand loyalty which Stanley will need to experiment a bit with to see where they can benefit most.
Overall we at Tool Report see this brand acquisition as a great move for everyone. For Sears the selling of the Craftsman line brings in much needed cash to keep their slipping stores from sinking and further. Hopefully they will parlay this influx of cash with a plan to spring their Kmart and Sears stores from there downward movement.
Check out the official Stanley Black & Decker letter here.