Watch list for august 18: ATHM,XCIT,CASL,S,CMOS,TLB
Sears Agrees To Sell Auto-Parts Store Chain To Advance Auto
NEW YORK -(Dow Jones)- Sears, Roebuck & Co. late Monday said it has agreed to sell its troubled Parts America chain of auto-parts stores to Advance Auto Parts for $175 million in cash and a 40% stake in Advance.
The unit operates more than 600 parts and accessories stores in the U.S. and a wholesale dealer network. The business had sales of $1.3 billion last year. Advance,which operates 915 automotive parts and accessories stores in 17 states, had sales of $848.1 million last year.
Advance is owned by an investor group, which includes an investment fund organized by Freeman Spogli & Co. The Freeman fund said it will invest $70 million in Advance. Sears expects the deal to close by the end of this year, subject to regulatory approvals.
Hoffman Estates, Ill.-based Sears (S) last month said it's considering selling its 126-store HomeLife unit, raising the prospect that it would also shed the ailing Parts America division.
Sears told analysts earlier this year that it would consider shedding business units that weren't meeting certain return-on-invesment goals.
That division lost money last year, in part from a restructuring of the business,
which included a name change from Western Auto and the removal of repair services from
the stores. Going to a parts-only format is difficult at a time when there are fewer
amateur auto mechanics, because cars have become much more complex. The division also
faces extremely tough competition from the nation's top player, Autozone Inc.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
|
