About Sears Holdings

Sears Holdings Corporation, together with its subsidiaries, operates as an integrated retailer in the United States. The company operated a national network of stores with full-line and specialty retail stores in the United States operating through Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co. (Sears). Further, the company operates various Websites under the sears.com and kmart.com banners, which offer various products and provide the capability for its members and customers to engage in cross-channel transactions, such as free store pickup, buy in store/ship to home, and buy online, return in store. The company is also the home of Shop Your Way, a free membership program that connects its members to personalized products, programs and partners. Through a network of national and local partners, members could shop their favorite brands, dine out and access an array of partners, such as Uber and fuboTV to earn CASHBACK in points to redeem for savings on future purchases at Sears, Kmart, Lands' End and at ShopYourWay.com. The company is a major home appliance retailer, as well as offers tools, lawn and garden, fitness equipment, automotive repair and maintenance; and is a primary player in the connected solutions market. The company offers key proprietary brands, including Kenmore and DieHard. The company’s Kenmore and DieHard brands are also available on Amazon.com. The company also maintains an apparel and home offering, including such labels as Jaclyn Smith, Joe Boxer, Route 66, Cannon, Adam Levine, and Levi's; and also offers Lands' End merchandise in some of its Full-line stores. The company is a major provider of appliance and product repair services, with approximately five million service calls made annually. Segments The company operates through two segments, Kmart and Sears Domestic. Kmart This segment operates Kmart stores across 47 states, Guam, Puerto Rico and the U.S. Virgin Islands. This store consists of discount stores, averaging 94,000 square feet, and Super Center, approximately 185,000 square feet. Majority Kmart stores are one-floor, free-standing units that carry an array of products across various merchandise categories, including consumer electronics, seasonal merchandise, outdoor living, toys, lawn and garden equipment, food and consumables, and apparel, including products sold under such labels as Jaclyn Smith, Adam Levine, Joe Boxer, Basic Editions and certain proprietary Sears branded products (such as Kenmore and DieHard) and services. The company also offers an assortment of major appliances, including Kenmore-branded products, in all of its locations. There are Kmart stores that also operate in-store pharmacies. The Super Center combines a full-service grocery along with the merchandise selection of a discount store. There are also three Sears Auto Centers operating in Kmart stores, offering various professional automotive repair and maintenance services, as well as an assortment of automotive accessories. Kmart offers a layaway program, which allows members and customers to finance their purchases both in-store and online. In addition, the company’s members and customers have the ability to buy online and pick up in store through mygofer.com, kmart.com or shopyourway.com. Kmart also sells its products through its kmart.com Website and provides members and customers enhanced cross-channel options, such as buying through a mobile app or online and picking up merchandise in one of the company’s Kmart or Sears Full-line stores. Sears Domestic As of February 3, 2018, this segment’s operations consisted of the following: Full-line Stores: Includes stores located across 49 states and Puerto Rico, primarily mall-based locations averaging 159,000 square feet. Full-line stores offer an array of products and service offerings across various merchandise categories, including appliances, consumer electronics/connected solutions, tools, sporting goods, outdoor living, lawn and garden equipment, certain automotive services and products (such as tires and batteries), and home fashion products, as well as apparel, footwear, jewelry and accessories for the whole family. The company’s product offerings include its proprietary Kenmore, DieHard, WallyHome, Bongo, Covington, Simply Styled, Everlast, Metaphor, Roebuck & Co., Outdoor Life and Structure brand merchandise, and other brand merchandise, such as Roadhandler and Levi's. Lands' End, Inc. continues to operate 151 ‘store within a store’ departments inside Sears Domestic Full-line locations. The company also has Sears Auto Centers operating in association with Full-line stores. In addition, there are free-standing Auto Centers that operate independently of Full-line stores. The company extends the availability of its product selection through the use of its sears.com and shopyourway.com Websites, which offer an assortment of home, apparel and accessory merchandise; and provide members and customers the option of buying through a mobile app or online and picking up their merchandise in one of the company’s Sears Full-line or Kmart stores. Specialty Stores: Includes specialty stores (primarily consisting of the free-standing Auto Centers noted above) located in free-standing, off-mall locations or high-traffic neighborhood shopping centers, including three DieHard Auto Centers - two in Detroit and one in San Antonio. Specialty stores also include Sears Appliances and Mattresses stores in Ft. Collins, Colorado, Camp Hill, Pennsylvania, Pharr, Texas and Honolulu, Hawaii. Commercial Sales: The company sells Kenmore appliances to home builders and property managers through Kenmore Direct, the business-to-business sales organization of KCD Brands. Kenmore Direct operates using various sales channels, including an Amazon Business sales account. The company also sells an assortment of appliance brands, including luxury brands, parts and services to builders, developers, designers, among other commercial and residential customers through Monark Premium Appliance Co., which includes California Builder Appliances, Inc. (doing business as Monark Premium Appliance Co. of California); Florida Builder Appliances, Inc. (doing business as Monark Premium Appliance Co.); and Starwest, LLC. (doing business as Monark Premium Appliance Co. of Arizona). Home Services: Product Repair Services, the major provider of appliance and product repair services, is a key element in the company’s active relationship with approximately 30 million households. With approximately 5,200 service technicians making approximately five million service calls annually, this business delivers a range of retail-related residential and commercial services across all 50 states, Puerto Rico, Guam and the Virgin Islands under either the Sears Parts & Repair Services or A&E Factory Service trade names. Commercial and residential customers could obtain parts and repair services for all major brands of products within the appliances, lawn and garden equipment, consumer electronics, floor care products, and heating and cooling systems categories. The company also provides repair parts with supporting instructions for ‘do-it-yourself’ members and customers through its searspartsdirect.com Website. This business also offers protection agreements, home warranties and Kenmore and Carrier brand residential heating and cooling systems. Home Services also includes home improvement services (primarily siding, windows, cabinet refacing, kitchen remodeling, roofing, carpet and upholstery cleaning, air duct cleaning, and garage door installation and repair) provided through Sears Home Improvement and Sears Home & Business Franchises. Delivery and Installation: Provides both home delivery and retail installation services for the company’s retail operations with approximately three million deliveries and installation calls made annually. Also includes Innovel Solutions, Inc., which provides delivery services for third party customers. Customers The Home Depot and Lowe's accounted for approximately 16% of the company’s 2017reported revenues. Dispositions In 2017, the company sold the Craftsman business to Stanley Black & Decker. Trademarks and Trade Names The KMART and SEARS trade names, service marks and trademarks, used by the company both in the United States and internationally, are material to its retail and other related businesses. The company’s KENMORE and DIEHARD brands are among the recognized proprietary brands in retailing. These marks are the subject of various United States and foreign trademark registrations. The company’s other primary trademarks and service marks include ATHLETECH, BLUELIGHT, COVINGTON, ROEBUCK & CO., SHOP YOUR WAY, SMART SENSE, STRUCTURE, THOM MCAN, and WALLY, which also are registered or are the subject of pending registration applications in the United States. Seasonality The retail business is seasonal in nature, and the company generates a high proportion of its revenues, operating income and operating cash flows during the fourth quarter of its year (year ended February 2018), which includes the holiday season. As a result, the company’s overall profitability is heavily impacted by its fourth quarter operating results. Additionally, in preparation for the fourth quarter holiday season, the company increases its merchandise inventory levels, which are financed from operating cash flows, credit terms received from vendors and borrowings under its domestic credit agreement. Fourth quarter reported revenues accounted for approximately 26% of total reported revenues in 2017. Competition Walmart, Target, Kohl's, J.C. Penney, Macy's, The Home Depot, Lowe's, Best Buy, and Amazon.com are some of the national retailers and businesses with which the company competes. History Sears Holdings Corporation was founded in 1899.