Sears' new parent company, Transform Holdco LLC, is merging with the Sears Hometown and Outlet Stores.
Sears Hometown stores, which are independently owned and only stock hard lines, such as appliances and garden tools, spun off in 2012. The common ownership allows the company to move forward with its test of smaller-format stores.
The Sears Hometown locations are 10,000 to 15,000 square feet instead of the 160,000-square-foot department-store model.
"We believe that reuniting our Sears Hometown segment stores with Transform's Sears full-line stores will result in a more consistent customer experience across Sears branded storefronts, generate higher total revenue and leverage efficiencies of scale to improve costs and margins, all of which could lead to improved profitability for Sears Hometown's dealers and franchisees," Will Powell, chief executive of Sears Hometown and Outlet Stores, said in a statement.
Jeff Skoglund, who owns the Sears Hometown store in Brainerd, thinks it will be good to have the company under one umbrella again instead of having two separate companies with two websites.
"I hope it will make it easier to get Kenmore products," he said. "We're paying royalties now and I'm hoping that [we] won't have to do that after the merger."
Sears Hometown stores closed earlier this year in Forest Lake, Detroit Lakes and Austin, Minn.
Wendy Hamm, who owned the Forest Lake location, said her Cambridge store will remain open.
"I ended my contract in Forest Lake because I couldn't find enough people for staffing," she said.
The independently owned Sears Outlet in Coon Rapids is still in business along with 10 hometown stores throughout the state.
The company has 491 hometown stores and 126 outlet stores in 49 states.
Sears escaped bankruptcy in February, and some see the smaller stores as the company's first attempt to find a new path. Nearly 500 stores are still operating. With the closing of the Mall of America store in March, Sears has no full-line department stores left in the Twin Cities.
The transaction is expected to close later this year.