SAN FRANCISCO (AP) — Sears Holdings Corp. said Thursday that it plans to spin off its Orchard Supply Hardware Stores Corp. business as a separate, publicly traded company.
The department store retailer said in a filing with the Securities and Exchange Commission on Thursday that it believes the chain, which runs 89 stores in California, will generate more value for shareholders as a standalone company. Sears shareholders will own 80 percent of Orchard, and the remaining 20 percent will be held by Ares Management LLC.
Orchard got its start in 1931 as a farmer-run purchasing co-op in San Jose, Calif. and was bought by Sears, Roebuck and Co. in 1989. Orchard recorded net income of $8.7 million on $660.7 million in revenue in fiscal 2010. Its revenue has fallen for several years in a row, though, and its net income has bounced around. In 2008, the company posted a loss of $243.4 million after recording a hefty charge.
For purposes of calculating a registration fee, Sears valued the Orchard IPO at $82 million. The shares are expected to trade on Nasdaq under the ticker symbol "OSHS."
Sears, based in Hoffman Estates, Ill., said the spin-off still needs final approval from its board.