Stanley Black & Decker paid $525 million in cash to Sears, also promising to make a $250 million payment at the end of year three. Additionally, the company will send annual payments to Sears of between 2.5 and 3.5% on new Stanley Black & Decker sales of Craftsman products through year 15. The move means that Lowe’s will indirectly providing funding to Sears. It remains the be seen how the introduction of Craftsman will impact Lowe’s premium tool private brand Kobalt Tools which occupies a similar space.
Craftsman will continue to be sold by Sears. The purchase by Stanley Black & Decker provided Sears the right to sell Craftsman products made by its existing suppliers, royalty-free, for up to 15 years.
“We have been more than impressed with the level of commitment and support afforded by Lowe’s for the Craftsman brand,” the president of Stanley Black and Decker’s global tools and storage division, Jeffrey Ansell, said on a call with analysts and investors Tuesday morning.
“We continue working with other channel partners and continue to provide them with successful programs to facilitate their growth as well,” Ansell added.
In January, when the purchase was first announced, Stanley Black and Decker pointed out that “only approximately 10% of Craftsman-branded products are sold outside of Sears Holdings and the agreement will enable Stanley Black & Decker to significantly increase Craftsman sales in these untapped channels.”
Starting in the second half of 2018, a broad assortment of Craftsman products will be available both in Lowe’s stores and online, adding another retailer with national exposure to that list. Stanley Black and Decker will also work with Lowe’s to manufacture and develop other products for the home improvement retailer, making the two underlying partners.