World & Nation

Sears buys 3 suburban Kmart stores

Tribune staff reporter

Sears, Roebuck & Co. will take over three suburban Chicago Kmart stores, in a package deal for 50 Kmart stores worth $575.9 million.

The new Sears stores will offer some groceries and convenience items as well as Sears standbys such as home appliances, tools and clothing, the Hoffman Estates-based retailer said today.

The three local stores are on Hicks Road in northwest suburban Palatine, on Plainfield Road in west suburban Willowbrook and on South Cicero Avenue in south suburban Crestwood.

Kmart will continue to operate the stores during this year’s holiday shopping season, said Kmart Holding Corp. spokesman Stephen Pagnani. Likely the stores will have clearance sales 60 to 90 days before April, by which time they’ll be handed over to Sears. Kmart now has 69 stores in Illinois.

Sears said it would consider retaining the Kmart stores’ sales associates.

The off-the-mall stores are smaller versions of the Sears Grand format, which proved successful in north suburban Gurnee and in Utah and Nevada. A fourth Sears Grand store is set to open next month in California.

Only one or two of the 50 Kmart stores will be converted to Sears Grand, said Sears spokesman Chris Brathwaite, a call to be made largely on the size of the store. “Given the breadth of merchandise customers find at Sears Grand, we want to maintain their level of expectation,” Brathwaite said.

The rest of the new stores will bear the Sears name by the end of 2005, although the nameplate may be different from the mall anchors, Brathwaite said. Other off-mall stores favor distinct branding for their larger stores, as Target Corp. does with its Super Target and Target Greatland.

“Our competitors have the same issues in terms of customer confusion, and customers seem to know what they can expect of each one,” Brathwaite said.

But like Sears Grand, the new off-mall stores will compete with Wal-Mart, Target and other variety stores and will have a similar layout, with a single bank of cash registers at the front of the store.

Eventually, the new Sears concept may change the look of other Sears stores. Brathwaite noted that mall stores are selling DVDs and using price scanners, ideas cribbed from Sears Grand. “We take key lessons from the full-line stores and apply them to the off-mall stores, and vice versa,” he said.

Sears also will sublease six off-mall Wal-Mart stores in mid-size cities, including downstate Pekin and in Evansville, Ind., and convert them to the new format. There are no current plans to convert Sears Hardware or dealer stores to the new format, Brathwaite said.

The announcement marks the closing of a deal first announced in July for Sears to buy many as 54 Kmart stores at $620 million. Early this month, Sears scaled back the purchase to 45 stores for $524 million, with up to another six for $65 million. Kmart this summer sold 18 other stores to the Home Depot hardware chain for $271 million.