Costco Acquires Lampert's 'Final Mile' Logistics Firm -- WSJ
March 18 2020 - 3:02AM
Dow Jones News
By Colin Kellaher and Suzanne Kapner
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 18, 2020).
Costco Wholesale Corp. on Tuesday said it acquired logistics
company Innovel Solutions from Transform Holdco LLC, the operator
of Sears and Kmart stores, for $1 billion in cash.
The deal is Costco's largest acquisition since it merged with
Price Club in 1993, and continues a broader effort by Sears's owner
to shed assets. Transform Holdco, the company controlled by
financier Edward Lampert that acquired hundreds of Sears and Kmart
stores out of bankruptcy, said it would use proceeds from the sale
to repay all of its non-real-estate debt.
Costco said Innovel employs more than 1,500 people and operates
11 distribution centers and more than 100 final-mile cross-dock
centers. The Issaquah, Wash., warehouse-club operator said Innovel
provides final-mile delivery and installation for large and bulky
products, such as appliances, furniture and mattresses.
The company, which has already closed many stores, said it plans
to further streamline its retail operations over the next several
months and focus on stores with a strong record of success or
meaningful real-estate value. It has been opening smaller stores
and last year bought the Sears Hometown Stores, a chain that sells
mainly appliances, tools and other hardgoods.
Mr. Lampert has divested other assets, including the DieHard
battery brand, which he sold to Advance Auto Parts Inc. in
December. Innovel was considered the crown jewel of the businesses
that Mr. Lampert bought out of bankruptcy, according to people
familiar with the situation. He also owns Sears Home Services,
which provides service and repairs for appliances; Sears Parts
Direct, which sells replacement parts; Sears Home Improvement,
which offers remodeling services; and other businesses.
Costco, which has been a customer of Innovel since 2015, said it
funded the deal with its existing cash balances.
Write to Colin Kellaher at colin.kellaher@wsj.com and Suzanne
Kapner at Suzanne.Kapner@wsj.com
(END) Dow Jones Newswires
March 18, 2020 02:47 ET (06:47 GMT)
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