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Sears sells HomeLife unit
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November 19, 1998: 3:39 p.m. ET
Sears gets $100M cash, $10M note and 19% stake in furniture retailer
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NEW YORK (CNNfn) - Sears, Roebuck & Co. agreed Thursday to sell its HomeLife Furniture retailing subsidiary to Citicorp Venture Capital and a group of investors for $100 million while maintaining an ownership stake in the company.
Under terms of the deal, Sears will receive $100 million in cash for HomeLife, a $10 million note and a 19 percent stake in the company that will be formed through the alliance of CVC and the other investors.
The new company also will assume about $30 million of capital lease obligations.
The transaction is expected to close by the end of the year and will result in a 5 cent per share loss for Sears' fiscal year.
"This new alliance creates tremendous opportunity for both HomeLife and Sears," said Arthur C. Martinez, company chairman and chief executive officer of Sears. "This transaction represents another step by Sears to redeploy non-core assets and focus on growing our core businesses."
"HomeLife's new business platform is expected to provide cooperative opportunities with CVC's furniture manufacturing partners, while maintaining HomeLife's already strong relationships with its current vendors and suppliers," Martinez added.
HomeLife operates 126 stores in the United States and Puerto Rico. The chain is the leading furniture retailer in the U.S. The company will retain its Chicago area headquarters.
"CVC strongly supports our business strategy, management team, merchandise direction and focus on the future," said Joseph Baron, president of HomeLife since 1996. "This alliance will be transparent to our customer, who will see no change in the high level of service or merchandise assortments that she expects."
Shares of Sears (S) rose 1/16 to 47-11/16 Thursday afternoon on the New York Stock Exchange following the announcement. 
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Sears
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