Who would have guessed that K-Mart and Sears would have merged to create a new company! Sears Holding Corp. is the fresh title. “The new company is expected to have $55 billion in annual revenues and 3,500 outlets. It will be the third largest retailer in the U.S., after Wal-Mart Stores Inc. and Home Depot Inc.”
I am shocked by this merger! I really do wish the best for K-Mart and Sears, but it really doesn’t make too much sense. Both companies have been struggling to keep up as of late, and both companies have different images!
Sears has a great reputation for the quality of their tools and other home appliances. I’m wondering how that will match up with the saying “K-Mart Fall Apart!” Is Martha Stewart still going to be around and involved with Sears Holding Corp.? I really hope that they have some excellent ideas for success, because I think this will be a huge challenge.
2 comments:
Sears and K-Mart can be a positive merger. Sears and K-Mart both have some of the most profitable private label brands in the country. By merging they are able to sell those private label goods in more locations. This merger will be profitable as long as they over come both companies "stuck in the middle" competitive strategies.
This merger doesn't make much sense to me either.
I know what was in it for Sears - money. K-Mart had to pay a premium to get Sears' shareholders to agree to this, and it makes sense to sell out for more money.
But what is K-Mart getting? They're getting some decent brand names, and locations that are predominantly in malls. Is that an improvement for a company that has some decent brand names (well, one at least) and a bunch of locations near malls? I don't think so.
The evidence on mergers and acquisitions is that they usually don't turn out to be good deals for the acquiring firm. This doesn't seem any different to me.
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