Sears, Roebuck & Co. said it will buy Orchard Supply Hardware Stores Corp. for $415 million in cash and assumed debt to help expand its fast-growing chain of hardware stores.
Orchard Supply’s 60 stores in California will help Sears carve a niche between Home Depot Inc.’s cavernous stores and mom-and-pop shops, analysts said. The 115 Sears hardware stores and Orchard Supply focus on homeowners needing small repairs, while the warehouse chains aim at complex jobs like renovations.
The purchase is part of Chairman Arthur Martinez’s effort to shift goods such as tools and furniture into specialized chains from its department stores. That’s created new avenues for growth.
“Orchard is right in the center of the target for us,” said Martinez in an interview. “They have an identical customer and an identical strategy.”