HOFFMAN ESTATES, Ill.--(BUSINESS WIRE)--Sears Hometown and Outlet Stores, Inc. (NASDAQ:SHOS) announced today the development of new transactional websites and the closing of an amended credit agreement.
“Both the new websites and our credit agreement are important next steps for the future of our company,” said Will Powell, President and CEO of Sears Hometown and Outlet Stores, Inc.
Hometown eCommerce Launch:
Recently ranked 111th in the Internet Retailer 500, Sears Hometown and Outlet Stores has further expanded its capabilities as an ecommerce retailer with the launch of three new ecommerce websites for its Hometown segment: SearsHometownStores.com, SearsHomeApplianceShowroom.com and SearsHardwareStores.com. Prior to the launch of these sites, the company operated SearsOutlet.com and sold merchandise through 3rd party marketplaces including eBay. As part of the company’s larger IT transformation project, the new websites launched one quarter earlier than planned, allowing the sites to be live prior to the holiday season.
“These new sites allow us to provide a cohesive, local Omni-channel experience,” said David Buckley, Chief Marketing Officer and Vice President of eCommerce. “Consumers can see in-store pricing and availability, buy online and pick up in-store, order product to be delivered to the store for free, or have the product shipped directly to their home.”
Buckley continued, “We believe this will improve the Company's long-term competitive position. Our estimates are that more than 20 percent of appliance sales are now occurring online, with over 75 percent of those purchases being delivered directly to the consumer. Based on our experience with SearsOutlet.com, the company also expects a significant improvement in the effectiveness of digital marketing to drive brick and mortar sales.” In 2016, the Company was ranked by Internet Retailer as the 25th fastest growing retail chain in ecommerce.
Amended Credit Agreement:
On November 1, 2016, the Company and certain affiliates entered into an Amended and Restated Credit Agreement which provides (subject to availability under a borrowing base) for aggregate maximum borrowings of $250.0 million (the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement provides for extended revolving credit commitments in an aggregate amount equal to $170.0 million (the “Extended Revolving Credit Commitments”) and non-extended revolving credit commitments in an aggregate amount equal to $80.0 million (the “Non-Extended Revolving Credit Commitments”).
Ryan Robinson, Chief Administrative Officer and Chief Financial Officer, said, “We are pleased to announce the launch of the Amended and Restated Credit Agreement. The agreement provides financial flexibility to continue to pursue our business and operating strategies including our America's Appliance Experts® (‘AAE’) program, merchandise assortment improvements, and our IT transformation project. The financing provides substantial liquidity to finance the business for several years.” As of the closing date, the Company had $91.9 million of loans and $133.5 million of availability.
The Extended Revolving Credit Commitments will mature on the earlier of (1) February 29, 2020 and (2) six months prior to the expiration of certain contracts entered into with Sears Holding Corporation, unless such agreements are extended to a date later than February 29, 2020 or terminated on a basis reasonably satisfactory to the administrative agent. The Non-Extended Revolving Credit Commitments will mature on the earlier of (1) October 11, 2017 and (2) six months prior to the expiration of certain contracts entered into with Sears Holdings Corporation, unless such agreements are extended to a date later than October 11, 2017 or terminated on a basis reasonably satisfactory to the administrative agent.
The Amended and Restated Credit Agreement is secured by a first lien security interest on substantially all the assets of the Company and its subsidiaries, other than intellectual property and owned real estate. The Amended and Restated Credit Agreement includes a number of affirmative and negative covenants and customary events of default. In addition, upon excess availability falling below a certain level, the Company is required to comply with a minimum fixed charge coverage ratio.
This description is qualified in its entirety by reference to the Amended and Restated Credit Agreement and the related Amended and Restated Guaranty and Security Agreement, copies of which are attached to a Form 8-K filed today with the Securities and Exchange Commission.
About Sears Hometown and Outlet Stores, Inc.
Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) is a national retailer primarily focused on selling home appliances, lawn and garden equipment, tools and hardware. As of July 30, 2016, Sears Hometown and Outlet Stores, Inc. and its dealers and franchisees operated 1,123 stores across all 50 states as well as in Puerto Rico and Bermuda. In addition to merchandise, Sears Hometown and Outlet Stores, Inc. provide consumers with access to a full suite of services, including home delivery, installation and extended service contracts.
Operating through two segments—the Sears Hometown and Hardware segment and the Sears Outlet segment—Sears Hometown and Outlet Stores, Inc. and its subsidiaries offer franchise and dealership opportunities focused on selling, as applicable, top brand home appliances, hardware, tools, lawn and garden equipment and outlet merchandise. For more information about Sears Hometown & Outlet Stores, Inc., visit www.shos.com. To learn about the opportunity to own and operate a store format, visit www.ownasearsstore.com.