Sears Hometown and Outlet Stores

Sears Hometown and Outlet Stores Inc.
Company type	Public
Industry	Retail
Founded	April 2012; 14 years ago
Defunct	October 23, 2019
Fate	Acquired by Transform Holdco; Sears Outlet division sold to Franchise Group
Headquarters	Hoffman Estates, United States
Area served	United States, Puerto Rico, Bermuda
Key people	Will Powell (CEO, 2017)
Products	Home appliances, lawn and garden products, clothing, mattresses, sporting goods, tools
Number of employees	2,962 (2018)

Sears Hometown and Outlet Stores Inc. was a U.S.-based retailer focused on home appliances, lawn and garden products, clothing, mattresses, sporting goods, and tools. The company managed four distinct divisions: Sears Hometown, Sears Outlet, Sears Hardware and Appliance, and Sears Home Appliance Showrooms. Its corporate headquarters were located in Hoffman Estates, Illinois, and it was established in April 2012 as a spin-off from Sears Holdings.

As of May 2019, Sears Hometown and Outlet Stores, together with its network of independent dealers and franchise operators, managed 639 locations spanning 49 states, Puerto Rico, and Bermuda. In 2017, the company generated $1.719 billion in revenue under the leadership of CEO Will Powell. Its portfolio included Sears Appliance and Hardware, Sears Home Appliance Showrooms, Sears Hometown, and Sears Outlet.

On June 3, 2019, it was disclosed that Transform Holdco would acquire Sears Hometown and Outlet Stores. To secure regulatory approval for the transaction, Sears Hometown divested its Sears Outlet segment. The company officially dissolved on October 23, 2019, following the acquisition of the Sears Outlet division by the Franchise Group and the remainder by Transform Holdco.

The former subsidiary Sears Hometown continues to operate as a retail brand specializing in hardware and appliances under Transform Holdco’s ownership, with most stores functioning as locally owned franchises.

History

In 2012, Sears Holdings separated Sears Hometown and Outlet Stores to enhance profitability and boost investor confidence by creating an independent entity comprising over 1,100 Hometown stores and 122 Outlet locations. The Hometown stores functioned as smaller hardware and appliance retailers operated by independent owners, whereas Outlet stores offered discounted merchandise such as appliances, lawn equipment, apparel, and tools—often including discontinued or refurbished products.

In November 2013, Sears Hometown and Outlet Stores collaborated with the National Volunteer Fire Council to provide funding for local fire departments aimed at improving training programs and equipment availability.

Although Sears Holdings filed for Chapter 11 bankruptcy protection in October 2018, Sears Hometown and Outlet Stores remained unaffected due to its prior separation.

By April 2019, Transform Holdco announced intentions to acquire Sears Hometown and Outlet Stores as part of its growth strategy aligned with launching new Sears Home & Life outlets. The initial acquisition proposal was declined, raising concerns about possible liquidation similar to that experienced by Sears Holdings. Eddie Lampert—then the largest shareholder and former CEO of Sears Holdings—actively sought to acquire the company to avoid liquidation.

In June 2019, Transform Holdco reached an agreement to purchase the remaining shares of Sears Hometown and Outlet Stores contingent upon divesting the Sears Outlet division. At that time, the company operated 491 Hometown stores alongside 126 Outlet stores across 49 states plus Puerto Rico and Bermuda.

In August 2019, Franchise Group announced its intention to acquire the Sears Outlet division for $132.9 million to fulfill conditions set by Transform Holdco’s acquisition agreement. The sale—including Buddy's Home Furnishing businesses—closed in October 2019, after which Franchise Group rebranded these outlets as American Freight stores. On the same day, Transform Holdco completed its purchase of the remaining Sears Hometown locations.

On December 13, 2022, Sears Hometown filed for Chapter 11 bankruptcy protection. Following this filing, all remaining Sears Hometown stores were liquidated and permanently shut down.

Financial Overview

Year	Revenue (in thousands USD$)	Net Profit (in thousands USD$)	Total Assets (in thousands USD$)	Number of Employees	Number of Stores
2013	2,453,606	60,080	785,803	4,935	1,245
2014	2,421,562	35,550	847,185	4,485	1,260
2015	2,356,033	−168,805	645,722	3,634	1,260
2016	2,287,788	−27,261	633,833	4,053	1,160
2017	2,070,056	−131,919	468,426	3,600	1,020
2018	1,719,951	−95,057	412,688	2,962	900

Sears Hometown Stores

Sears Hometown Stores consisted largely of independently operated outlets retailing Sears products. By 2013, approximately 70 to 80 percent were owned independently. These smaller-format stores typically have owners who either lease or own the premises while Sears Hometown and Outlet Stores handles marketing and inventory management without charging franchise fees. Positioned mainly in smaller communities where full-size Sears stores are not viable, their product focus includes hardware items, appliances, and lawn and garden equipment. The stores stock Sears brands such as Kenmore, Craftsman, and DieHard in addition to other well-known national brands. With an average footprint of about 8,500 square feet and a community-centered approach, the chain reached 393 locations by August 2019 before being acquired by Transform Holdco. In 2022, the company announced plans to shut down over 170 Hometown stores due to ongoing financial difficulties. By September 2022 fewer than 150 locations remained operational. On December 13, 2022, Sears Hometown filed for Chapter 11 bankruptcy protection and eventually liquidated all remaining outlets.

Sears Outlet Store

Operating as a discount retail chain throughout the United States, Sears Outlet offers a variety of products including appliances, clothing, mattresses, sporting goods, tools, and lawn and garden supplies. Merchandise includes new items as well as discontinued models, reconditioned goods, overstocked products, and scratch-and-dent items sold at discounts ranging from 20% to 60% below standard retail prices. Each store typically spans over 18,000 square feet.

Originating in 1968 as Sears surplus stores in Kansas City, the brand was rebranded as Sears Outlet in 1994. By 1995 it had centralized its repair services and distribution through dedicated Outlet Repair and Distribution Centers; by 2015 there were 22 such centers in operation. Apparel was incorporated into the product mix in 2008 with liquidation merchandise sourced from Lands' End. The launch of SearsOutlet.com in 2009 expanded the brand's e-commerce footprint and enabled nationwide shipping by 2011.

In 2012 Sears Hometown and Outlet Stores was separated from Sears Holdings; at that time it operated 122 Sears Outlet locations. By February 2014 the count had increased to 143 stores—115 company-owned and 28 franchised—as part of a franchising effort initiated in 2012. Home appliances made up approximately 78% of the $610 million revenue generated by Sears Outlet in 2013. The company also participated in charitable activities through a partnership with the Make-A-Wish Foundation during 2014.

As of August 2019 Sears Outlet maintained operations at 127 stores. After being acquired by Transform Holdco later that year, the division was sold to Franchise Group—the parent company of Liberty Tax—in October 2019. Franchise Group then purchased American Freight in December 2019 and transitioned all Sears Outlet locations to operate under the American Freight brand by April 2020.

Sears Home Appliance Showroom

The Sears Home Appliance Showrooms consist of in-store exhibits spanning approximately 5,000 square feet, with a primary emphasis on appliances. These showrooms are equipped with internet kiosks that allow shoppers to compare prices and place orders for items not currently in stock. As of October 2019, there were 15 such locations operating.

Sears Appliance and Hardware Store

With an average size close to 28,000 square feet, these stores provided the complete range of Sears hardware and appliance products, predominantly serving suburban areas. All of these stores had ceased operations by June 2019.

Awards

Sears Hometown and Outlet Stores received the Customer Engagement accolade from Retail TouchPoints in recognition of their dynamic in-store marketing initiative.

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