How it started
2004–2005: Formation
On November 17, 2004, the management of Kmart Holding Corporation announced its intention to purchase Sears, Roebuck and Co. under a new corporation. Kmart previously emerged from Chapter 11 bankruptcy protection on May 6, 2003. The new corporation became known as Sears Holdings Corporation, simply known as Sears Holdings. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands. The merger of Kmart and Sears closed on March 24, 2005, following affirmative shareholder votes of both companies. With the acquisition, the former HQ of Kmart in Detroit moved to the Sears Headquarters. The result of the merger was Kmart and parent Kmart Holding Corporation and Sears became subsidiaries of the new Sears Holdings Corporation. Sears Holdings now operated Sears and Kmart stores. The company continued to market products under brands held by both companies.
The two companies cited several reasons for combining forces:
Sears had begun investing in new, larger off-mall stores, called Sears Grand. Earlier in the year, Sears had purchased dozens of current Super Kmart locations; the merger permitted the combined company to accelerate that process.
Proprietary brands held by both companies could be made more accessible to their target demographics by leveraging their combined real estate holdings. This was estimated to be an expected $200 million a year in revenue synergies.
At least $300 million a year in cost savings was expected annually, particularly in the supply chain and in administrative overhead.
From Wikipedia’s article on Sears Holdings Corporation, shared under CC BY-SA 4.0.3