SEARS ACCELERATES KMART CONVERSION

Vicki M. Young

NEW YORK -- Sears, Roebuck & Co. said in a regulatory filing with the Securities and Exchange Commission last week that it identified 25 of the 50 Kmart stores acquired in June for a "fast-track conversion."

Fast tracking pushes the timetable ahead of schedule. The retailer initially said the conversion would be done either by March 15 or April 15.

Sears also said the name of the new formatted stores will be announced in the "coming weeks."

The retailer said the converted sites will feature a "midsize format," which will offer shoppers a "best of both" version that incorporates the everyday needs of Kmart customers with the addition of destination-type categories typically found at Sears.

Sears said its goal for the conversion to midsize formats is to "retain our existing customer base in these stores and meet more of their shopping needs, while attracting new customers to the store with the expanded offering."

The SEC filing also disclosed that if Kmart Holding Corp.'s $11 billion offer to buy Sears, expected to close in early March, fails to take place, the stores would still be converted, but would follow the original timetable instead.

The anticipated merger would create the nation's third largest retailer.

Meanwhile, the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act has expired, clearing the way for the merger. The waiting period is required to allow the Federal Trade Commission and Department of Justice time to review anticompetitive issues related to the proposed merger.

The deal is still subject to shareholder approval.

Under the terms of the merger agreement, the new entity will operate under the name Sears Holdings Corp., with headquarters in Hoffman Estates, Ill., where Sears is based. Following the merger, the retailer is expected to have $55 billion in annual revenues.

The new company will have 2,350 full-line and off-mall stores and 1,100 specialty stores in the United States.