Costco Acquires Lampert's 'Final Mile' Logistics Firm -- WSJ

By Colin Kellaher and Suzanne Kapner 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 18, 2020).

Costco Wholesale Corp. on Tuesday said it acquired logistics company Innovel Solutions from Transform Holdco LLC, the operator of Sears and Kmart stores, for $1 billion in cash.

The deal is Costco's largest acquisition since it merged with Price Club in 1993, and continues a broader effort by Sears's owner to shed assets. Transform Holdco, the company controlled by financier Edward Lampert that acquired hundreds of Sears and Kmart stores out of bankruptcy, said it would use proceeds from the sale to repay all of its non-real-estate debt.

Costco said Innovel employs more than 1,500 people and operates 11 distribution centers and more than 100 final-mile cross-dock centers. The Issaquah, Wash., warehouse-club operator said Innovel provides final-mile delivery and installation for large and bulky products, such as appliances, furniture and mattresses.

The company, which has already closed many stores, said it plans to further streamline its retail operations over the next several months and focus on stores with a strong record of success or meaningful real-estate value. It has been opening smaller stores and last year bought the Sears Hometown Stores, a chain that sells mainly appliances, tools and other hardgoods.

Mr. Lampert has divested other assets, including the DieHard battery brand, which he sold to Advance Auto Parts Inc. in December. Innovel was considered the crown jewel of the businesses that Mr. Lampert bought out of bankruptcy, according to people familiar with the situation. He also owns Sears Home Services, which provides service and repairs for appliances; Sears Parts Direct, which sells replacement parts; Sears Home Improvement, which offers remodeling services; and other businesses.

Costco, which has been a customer of Innovel since 2015, said it funded the deal with its existing cash balances.

Write to Colin Kellaher at [e-mail] and Suzanne Kapner at [e-mail]

(END) Dow Jones Newswires

March 18, 2020 02:47 ET (06:47 GMT)

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