Sears owner reportedly intends to sell head office

Dive brief:

  • Sears and Kmart owner Transformco plans to bring his corporate campus near Chicago to the real estate market next year, according to local media.
  • Sears initially moved to its headquarters in Hoffman Estates, Ill., In 1992, leaving behind the names of Sears Tower for the retailer.
  • A spokesperson for the company told the Chicago Tribune that Transformco “is exploring development opportunities for the Hoffman Estates property that enhance its value to associates based there and the wider Hoffman Estates community.”

Dive overview:

For more than a decade, Transformco and its predecessor, Sears Holdings, staged an ongoing asset sale as the retailer’s sales base shrank at a rapid and continuous rate.

There are only a handful of full-line Sears and Kmarts department stores left today. This fall, the company closed the last Sears department store in its home state of Illinois. Shortly later, he decided to shut down the last Michigan Kmart, which started out with a dime store in Detroit.

Less than a decade ago, the combined number of Sears and Kmarts department stores numbered in the thousands. The dismantling of the Sears Empire began before Eddie Lampert took over the management and majority stake in Sears Holdings. Since Lampert’s involvement, however, the liquidation of the company has occurred at an astonishing rate. And in many cases, Lampert has been on both sides of a sale, stocks that have become the subject of litigation since Sears Holdings went bankrupt in late 2018.

Lampert and ESL Investments, his hedge fund, now own the remaining Sears and Kmart through Transformco. The company said it envisions its future in smaller specialty formats, including Sears Hometown and Home & Life stores, as well as its Shop Your Way loyalty program.

Sears spokesman Larry Costello told the Tribune that the company’s workforce and operational reductions “have reduced our need for a corporate campus that was built 30 years ago for the needs of a more centralized business ”.

In previous files, Sears Holdings said the Hoffman Estates campus contained some 200 acres with six interconnected office buildings and about two million square feet of office space. According to the Tribune, the site includes 100 acres of undeveloped land.

Other retailers have also sought cash from the sale of their corporate real estate. Clothing conglomerate Ascena Retail Group sold its headquarters in early 2020, shortly before the retailer filed for bankruptcy. Belk, which went bankrupt this year, has sought to sublet its offices in North Carolina. JC Penney sold its head office in 2017 as part of a sale-leaseback transaction intended to save and raise funds.

It is not known where Transformco will look for new offices. Sears has been based in or around Chicago since the late 19th century.