In a move to boost its top line, Sears Holdings Corporation (SHLD) has strategically entered into a license agreement with Dorcy International. As per the agreement, Dorcy will be allowed to sell Sears Holdings’ DieHard-branded rechargeable batteries and flashlights to the retailers in the U.S., Puerto Rico and the Caribbean.
Sears Holdings introduced the DieHard automotive batteries in 1967, which produced 35% more starting power than other comparable batteries. The DieHard’s Platinum Auto battery has been rated number one automotive battery for the fifth consecutive year for its power and performance.
Prior to this, Sears Holdings reported a disappointing first-quarter 2011 results. The company reported quarterly adjusted loss of $1.39 per share, well above the Zacks Consensus Estimated loss of $1.22 per share and plunged drastically from the prior-year quarter earnings of 16 cents per share. Including special items, loss per share came in at $1.58 compared with earnings of 14 cents in the prior-year quarter.
The drop in quarterly performance of the company was primarily attributable to the sluggish top-line performance. Management’s cost-cutting measures for enhancing profits were largely criticized as improving the merchandise mix and customer service would have been a better option.
Sears Holdings is the fourth largest broadline retailer in the U.S. offering home appliances, tools, lawn and garden equipment, electronics, automotive repair and maintenance products through a countrywide network of over 4,000 retail stores. Moreover, the company is the largest home services provider in the United States, with over 11 million service calls made annually. The flagship brands of the company include leading product labels like Kenmore, Craftsman and DieHard, Lands’ End, Jaclyn Smith, Joe Boxer, Apostrophe and Covington.
Head quartered in Columbus, Ohio, Dorcy International is a privately held company engaged in manufacturing and marketing of flashlights and batteries for over 55 years. The company has business with most of the world’s largest retailers including Target Corporation (TGT) and Wal-Mart Stores Inc. (WMT). In house design and engineering capability and availability of widest range of lighting products gives Dorcy a unique competitive advantage among its competitors.
Sears Holdings currently has a Zacks #5 Rank, implying a short-term ‘Strong Sell’ rating on the stock. Besides, the company retains a long-term ‘Neutral’ recommendation.
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