Sears' Financial Distress Costs

When a company is in financial distress and bankruptcy is possible, it may be forced into actions that it would not like to undertake. For example, Sears, which has been has been faced with declining sales and mounting losses, recently announced that it was selling its iconic Craftsman tool brand. The sale of Craftsman to Stanley Black & Decker is for $900 million. Under the terms of the agreement, Sears will be able to sell Craftsman tools for 15 years royalty free. Sears also announced that it will close an additional 150 stores.