SBD buys Craftsman from Sears

[DR99]

SBD has been on a buying spree lately. I thought TTI was going to play a little of this game but I think they didn't see the brand worth the cost possibly. I wonder what will happen with the C3 line of tools now though those are mostly made by TTI off Ryobi designs

[ChrisK]

So did they acquire C3 tools too?

[DR99]

The C3 line is part of craftsman I would assume so.

[Conductor562]

Where did you see this Jason?

 

I really figured it would be a smaller player that bought Craftsman to up their game. I'd like to see the details of the purchase. 

 

I've been saying all along I thought we'd see a big retail chain like Wal-Mart or someone end up with distribution rights, given their association with SBD, we may see that yet.

[DR99]

https://www.bloomberg.com/news/articles/2017-01-05/stanley-to-buy-craftsman-brand-from-sears-for-about-900-million

[Conductor562]

Ahh, found it on the WSJ.

 

https://www.google.com/amp/www.wsj.com/amp/articles/sears-sells-craftsman-brand-to-stanley-black-decker-1483623215?client=safari

 

$900 million is less than I would have expected, but with Sears maintaining some distribution rights, I guess it makes sense. It's good that the lifetime warranty will be honored, that was a big concern for people.

 

I honestly believe this will be a good thing for Craftsman. One thing is for sure, SBD couldn't do any worse by Craftsman than Sears has for the last few years. It's kinda exciting.

[DR99]

Just now, Conductor562 said:

Ahh, found it on the WSJ.

 

https://www.google.com/amp/www.wsj.com/amp/articles/sears-sells-craftsman-brand-to-stanley-black-decker-1483623215?client=safari

 

$900 million is less than I would have expected, but with Sears maintaining some distribution rights, I guess it makes sense. It's good that the lifetime warranty will be honored, that was a big concern for people.

 

I honestly believe this will be a good thing for Craftsman. One thing is for sure, SBD couldn't do any worse by Craftsman than Sears has for the last few years. It's kinda exciting.

Yep breaking the warranty would have been a bad move for SBD even though the savings might have been worth it. You could just say only tools with our new logo are warrantied, but that would be confusing still. I'm just really curious to see what happens with the C3 because of the connection to TTI. The battery powered OPE has been made by SBD or Greeworks depending on the year you bought it.

[Conductor562]

I also thought it was interesting that they said they would "increase their manufacturing footprint in the USA". To be honest, as a hand tool guy at heart, the Power tool business is an afterthought for me. I haven't taken Craftsman power tools seriously for years. Nothing against TTI, they only make tools to a price point that Sears requires, but the line will benefit from Sears not making the decisions. 

 

I would invision something Porter Cable ish, but I suppose we're about to find out.

 

I think there are brighter days ahead for the Craftsman line. 

[Stercorarius]

The thing that worries me is this 

I hope they dont water down Mac and Proto with craftsman garbage. What it sounds like though is that they are only buying the name. The agreement makes it sounds like.sears keeps doing what they are doing and SBD can slap Craftsman.on anything they want. That may account for why it was ao cheap. They (sears and SBD) both have rights to develop products under the craftsman name separately. The toolguyd article was a good read. I'd link it but it's on the home page and most of us just have to enter the into the address bar and it autocompletes to it. I'll have to read them other articles. Odd to think that now the tool players are just TTi, SBD, Apex, Ideal and the Snap-on cluster.

[Stercorarius]

14 minutes ago, Conductor562 said:

I also thought it was interesting that they said they would "increase their manufacturing footprint in the USA". To be honest, as a hand tool guy at heart, the Power tool business is an afterthought for me. I haven't taken Craftsman power tools seriously for years. Nothing against TTI, they only make tools to a price point that Sears requires, but the line will benefit from Sears not making the decisions. 

 

I would invision something Porter Cable ish, but I suppose we're about to find out.

 

I think there are brighter days ahead for the Craftsman line. 

I said something about not wanting to have CMan water down Proto or Mac (less concerned about Mac), but I would be okay with the reverse, where some Proto or Mac get rebadged as CMan and sold for slightly less $. What I would prefer over that is that they draw from the lines and create entirely new products and turn Craftsman into basically a made in the USA Gearwrench. Craftsman has always been a sad story for me. When I first started buying hand tools at fifteen all the old timers told me to go Craftsman. Their professional grade ones are awesome for a decent price. I fondled a few, looked at the price, and went and bought at HF. It would be awesome if they dug up some old Craftsman professional tools and rebooted the old Craftsman grade tools. They could sell them to enthusiasts, but the majority of consumers already have a poor image of Craftsman and it would be hard to sell these things. It's more likely that they see that they are junk tools so they go, "well looks like Black and Decker has a new brother" and use them as the B&D tier of hand tools. The Mac conversion program they referred to might mean they turn them into MAC's Blue-Point which would be exciting. I'll have to Amazon prime me some Craftsman tools once this whole thing goes through. I am excited to see what the Lenox/Irwin/Craftsman brands are like in two years. Exciting times for us tool touchers.

[Conductor562]

I imagine they intend to use Craftsman in conjunction with or in place of the Expert line they currently offer on the Mac truck. I don't think you have to worry about them sacrificing their cornerstone hand tool lines in Mac and Proto to boost a brand they don't have complete control over. 

 

The most intersting ting thing for me is the notion that Sears would still have the right to develop Craftsman tools. I think that statement needs some clarification. Would Stanley pay nearly $1B for a brand and allow Sears continue making stupid decisions and sourcing tools from competition like TTI? I'm interested to see what that means specifically. 

 

It it also sounds like Lawn & Garden may have been a big factor in this deal. We've known SBD wanted Roger involved in that market, and this may have been the best way they saw to do it.

 

I'm also not terribly surprised that power took sales only account for 10% of sales. Their power tools have sucked for a long time.

[khariV]

1 hour ago, Stercorarius said:

Odd to think that now the tool players are just TTi, SBD, Apex, Ideal and the Snap-on cluster.

 

This seems to be the way of everything nowadays.  There are fewer and fewer gigantic companies owning everything we touch than there ever have been in the past.  If you really want an eye opener, take a look at how many food brands are owned by 2-3 gigantic mega corporations and you'll seriously think about only ever shopping at the farmers market and growing your own.

[Stercorarius]

1 hour ago, khariV said:

 

This seems to be the way of everything nowadays.  There are fewer and fewer gigantic companies owning everything we touch than there ever have been in the past.  If you really want an eye opener, take a look at how many food brands are owned by 2-3 gigantic mega corporations and you'll seriously think about only ever shopping at the farmers market and growing your own.

As a guy who works for the evil giant agribusiness industry, I am okay with this.

[Todd the Tinkerer]

I think it will go 1 of 2 ways. Craftsman gets watered down and sold everywhere, milking as much money out of the brand until everyone stops buying or they will allow to brand to become what it once was and be a premium brand in home improvement stores. It should make for some interesting conversation on here


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[Stercorarius]

Interesting to read comments on the articles. Someone in the toolguyd comments quoted a release from Sears that I found interesting.

[BMack37]

What would be really weird is if SBD takes the Stanley line out of Lowe's...Kobalt and Craftsman one the same racks and shelves? I can definitely see Craftsman in Walmart. You have to wonder is Craftsman going to be the entry market and Stanley takes the step above them or the inverse? Right now Stanley covers multiple levels, this seems to be a solution for it.

[Conductor562]

I can't see Lowe's or HD putting Craftsman on their shelves, but who knows. It will certainly be interesting to see. 

 

WIth so much emphasis on American manufacturing in the press releases and stuff, SBD is poised to do what Sears should have done by making Craftsman back into the icon it was, a quality mid-range tool people feel comfortable buying. 

 

If it plays out that way, Wal-Mart would be the perfect solution. A whole section of quality tools, with warranty exchange, at a store with the market presence of Wal-Mart? I'm excited to see what plays out. 

[Todd the Tinkerer]

I can't see Lowe's or HD putting Craftsman on their shelves, but who knows. It will certainly be interesting to see. 

 

WIth so much emphasis on American manufacturing in the press releases and stuff, SBD is poised to do what Sears should have done by making Craftsman back into the icon it was, a quality mid-range tool people feel comfortable buying. 

 

If it plays out that way, Wal-Mart would be the perfect solution. A whole section of quality tools, with warranty exchange, at a store with the market presence of Wal-Mart? I'm excited to see what plays out. 

Man I couldn't imagine going to Walmart and waiting in line for 20 minutes to exchange my broken ratchet, only to get the privilege of arguing with workers about it having a lifetime warranty assuming they keep that.


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[Stercorarius]

I  wouldn't be surprised if it was a more available and more recognizable automotive equivalent to Blackhawk.

 

The only hole, and a fairly large one, in that theory is that SBD emphasizes how they want to have them more widely available. Does that mean more available than just Sears, or does that mean DeWalt levels of availability?

 

I hope that they spin it into a more USA focused, more marketable version of Blackhawk with an Automotive market in mind instead of an industrial one. Blackhawk is more available than craftsman in the sense that it is available at one store here instead of zero, but when you say the name Blackhawk few people have heard of it. Everyone has heard of Craftsman.  

 

The retailer is the biggest question in my mind. It seems to me that it all depends on what quality tier and consumer they target. There are a few potential ways they take this to. They are:

 

Homeowner targeted

 

They continue rape the brand for recognition and sell them at Walmart and/or home improvement stores. These are tools you buy in convenient kits and give as gifts to have under your sink in the event that you need a picture hung or make a stop at IKEA.

 

This is a potential option. I am optimistic that it won't as USA made tools will drive a higher price.

 

DIY'er Targeted

 

These are tools that have the appeal of the lifetime warranty and a low price point. They are marketed to people who change their own oil and like to do the occasional tinkering on projects. They don't see every day use. They have a similar price point to Husky or Tekton.

 

This is slightly more likely. This is the option that I would envision showing up at Lowe's and Home Depot. I don't know if they would be willing to provide shelving room for products that were in direct competition with Husky and Kobalt.

 

Contractor/Tradesman Targeted

 

These tools would have the selection and price of Milwaukee's hand tool lineup. This is by far the least likely alternative. This is a consumer base that has little overlap with Craftsman's historical and current consumer base. SBD already has this well covered with Stanley and DeWalt hand tools. Anymore would be redundant and unprofitable.

 

Entry Level Automotive 

 

This is where Craftsman currently precariously rests. Comparable brands would be Duralast, OEM, OTC, Performance tool, and Pittsburgh professional tools to name a few. You recommend them to a nephew who wants to work on his first car on a budget. They have the appeal of a lifetime warranty and affordable price point. They would have an advantage by being able to market the push toward American manufacturing without having the cost of actually having all their tools made in America.

 

This would be the easiest direction to take it in. They would draw on the existing consumer base and offer them in more locations. If they could convince Napa (where SBD already has a presence) or a large auto parts supplier to carry them they might have a chance at being successful. I can both see an auto parts company being eager to be a Craftsman distributor, and an Auto parts store being reluctant to add a dieing brand to a well saturated market to compete with the house brand. They would also market these heavily through online retailers.

 

Entry Level Professional Automotive

 

This is the tier where you find Carlyle and Blue Point. Blackhawk is SBD's offering in the industrial sector at this tier. They would have an advantage of some, if not all (who are we kidding not all), USA based manufacturing. This is where I hope they take it.

 

They would have to rebuild the image to its former glory. In my fantasy they take it this direction as it is the largest gap in SBD's offerings that I see in my mind. Craftsman has the consumer base in this sector that they could utilize. The slide I posted earlier mentioned a MAC conversion program. This fuels the hope that it could be Mac's Blue Point.

 

I would hope that it would be offered through more retailers than just the trucks and I think SBD is aware that it has a large enough potential that it would be marketed online and available in supply stores. Think the kind of places where Gearwrench or Sunex are available. You would not see these at HD or Lowe's or even Menards. I really don't expect Craftsman to ever make an appearance there. Those markets are too saturated. You might see it at equipment dealerships or  even stores like Big R.  

 

Entry or Professional Industrial 

 

I don't see this happening. SBD has this covered by Proto and Blackhawk. Craftsman may be sold in the same type of store.

 

Professional Automotive 

 

They lack the brand loyalty for this move. They also have their chunk of the market covered by Mac. This would be too difficult of a market to break into regardless. We may see them as a less premium option in MAC tool trucks.

 

 

 

 

Any thoughts? I'm sure this discussion has been had and thoroughly researched in the SBD corporate office for months before they made a solid game plan and went ahead with the buy.

 

 

 

 

 

 

[NicolasRamos]

27 minutes ago, Stercorarius said:

I  wouldn't be surprised if it was a more available and more recognizable automotive equivalent to Blackhawk.

 

The only hole, and a fairly large one, in that theory is that SBD emphasizes how they want to have them more widely available. Does that mean more available than just Sears, or does that mean DeWalt levels of availability?

 

I hope that they spin it into a more USA focused, more marketable version of Blackhawk with an Automotive market in mind instead of an industrial one. Blackhawk is more available than craftsman in the sense that it is available at one store here instead of zero, but when you say the name Blackhawk few people have heard of it. Everyone has heard of Craftsman.  

 

The retailer is the biggest question in my mind. It seems to me that it all depends on what quality tier and consumer they target. There are a few potential ways they take this to. They are:

 

Homeowner targeted

 

They continue rape the brand for recognition and sell them at Walmart and/or home improvement stores. These are tools you buy in convenient kits and give as gifts to have under your sink in the event that you need a picture hung or make a stop at IKEA.

 

This is a potential option. I am optimistic that it won't as USA made tools will drive a higher price.

 

DIY'er Targeted

 

These are tools that have the appeal of the lifetime warranty and a low price point. They are marketed to people who change their own oil and like to do the occasional tinkering on projects. They don't see every day use. They have a similar price point to Husky or Tekton.

 

This is slightly more likely. This is the option that I would envision showing up at Lowe's and Home Depot. I don't know if they would be willing to provide shelving room for products that were in direct competition with Husky and Kobalt.

 

Contractor/Tradesman Targeted

 

These tools would have the selection and price of Milwaukee's hand tool lineup. This is by far the least likely alternative. This is a consumer base that has little overlap with Craftsman's historical and current consumer base. SBD already has this well covered with Stanley and DeWalt hand tools. Anymore would be redundant and unprofitable.

 

Entry Level Automotive 

 

This is where Craftsman currently precariously rests. Comparable brands would be Duralast, OEM, OTC, Performance tool, and Pittsburgh professional tools to name a few. You recommend them to a nephew who wants to work on his first car on a budget. They have the appeal of a lifetime warranty and affordable price point. They would have an advantage by being able to market the push toward American manufacturing without having the cost of actually having all their tools made in America.

 

This would be the easiest direction to take it in. They would draw on the existing consumer base and offer them in more locations. If they could convince Napa (where SBD already has a presence) or a large auto parts supplier to carry them they might have a chance at being successful. I can both see an auto parts company being eager to be a Craftsman distributor, and an Auto parts store being reluctant to add a dieing brand to a well saturated market to compete with the house brand. They would also market these heavily through online retailers.

 

Entry Level Professional Automotive

 

This is the tier where you find Carlyle and Blue Point. Blackhawk is SBD's offering in the industrial sector at this tier. They would have an advantage of some, if not all (who are we kidding not all), USA based manufacturing. This is where I hope they take it.

 

They would have to rebuild the image to its former glory. In my fantasy they take it this direction as it is the largest gap in SBD's offerings that I see in my mind. Craftsman has the consumer base in this sector that they could utilize. The slide I posted earlier mentioned a MAC conversion program. This fuels the hope that it could be Mac's Blue Point.

 

I would hope that it would be offered through more retailers than just the trucks and I think SBD is aware that it has a large enough potential that it would be marketed online and available in supply stores. Think the kind of places where Gearwrench or Sunex are available. You would not see these at HD or Lowe's or even Menards. I really don't expect Craftsman to ever make an appearance there. Those markets are too saturated. You might see it at equipment dealerships or  even stores like Big R.  

 

Entry or Professional Industrial 

 

I don't see this happening. SBD has this covered by Proto and Blackhawk. Craftsman may be sold in the same type of store.

 

Professional Automotive 

 

They lack the brand loyalty for this move. They also have their chunk of the market covered by Mac. This would be too difficult of a market to break into regardless. We may see them as a less premium option in MAC tool trucks.

 

 

 

 

Any thoughts? I'm sure this discussion has been had and thoroughly researched in the SBD corporate office for months before they made a solid game plan and went ahead with the buy.

 

 

 

 

 

 

I wouldn't be surprised if they haven't gone through as many options as you did!

[BMack37]

2 hours ago, Conductor562 said:

I can't see Lowe's or HD putting Craftsman on their shelves, but who knows. It will certainly be interesting to see. 

 

WIth so much emphasis on American manufacturing in the press releases and stuff, SBD is poised to do what Sears should have done by making Craftsman back into the icon it was, a quality mid-range tool people feel comfortable buying. 

 

If it plays out that way, Wal-Mart would be the perfect solution. A whole section of quality tools, with warranty exchange, at a store with the market presence of Wal-Mart? I'm excited to see what plays out. 

 

Honestly, I just don't believe they're going to make good quality tools. If you do really believe they will do a mid-range tool selection from the USA, I'd start stocking up on Craftsman junk tools while on sale and when Sears finally goes bankrupt because there will be a free upgrade in your future. I hope I'm wrong because I'd be extremely happy with a 90s era Kobalt version of Craftsman...though I don't know if even then I'd be a customer...which is why I question whether they see the value in that return to the brand. 

 

 

[Conductor562]

Well, if I were making the calls, which I am grossly under qualified for and obviously am not, I'd look at my current brand identities and see where Craftsman fit it.

 

Homeowner Targeted

 

To me, this makes little sense. I already have a huge presence in this market with my namesake brand that I own outright. This market, while significant, represents the least informed tool buyer and the least likely to give a tinkers damn about premium options. 

 

DIY'ers

 

I have a market presence here as well. My Stanley brand has a presence in this market as do private label brands produced by me. However, Craftsman could drastically increase my market share in this category if price point is met.

 

 Contractor/Tradesman

 

I have a strong market presence here through my Dewalt brand, which is one of the conrnerstones of my business. I also just invested a metric shit tIn of money in Irwin who's strongest market presence is as a budget option in this market. I don't want to impede on that too much, so this is probably not my intended market.

 

Entry Level Automotive 

 

This represents a big weakness in my current market presence. Sure, you'll find my tools in this category, but I lack a truely identifiable brand that caters to this demographic. My potential for market share gains here is high.

 

Entry Level Professional Automotive 

 

Here is where it starts to get tricky. I just dumped a ton of money into trying to establish my Expert brand. I have my Mac brand to think about, so I have to be careful about where I go with this. I can't use my Mac dealer network to sling an unlimited lifetime supply of tools to people starting out who will never see a need to upgrade to Mac. 

 

Budget Industrial 

 

This isn't a huge business for me. I have a strong player in Blackhawk, but this just isn't a huge market. Because.....

 

Premium Industrial 

 

This is a huge part of my business. Proto is king in this market fueled by Goverment, military, and other projects funded by "other people's money" who aren't concerned with price. I'm not infringing on this business. 

 

Premium Automotive 

 

Again, this is a market I'm well established in and cannot afford to compromise. 

 

So where does this leave us? We could speculate until hell freezes over, but let's look at what SBD is telling us and what it means.

 

1.They plan to utilize increased USA manufacturing. This is an emerging trend and SBD has already taken small but critical steps in this direction. They have a huge, state of the art plant, in Dallas capable of producing mechanic tools, so why not? Unlike Sears who manufactured 0% of Craftsman tools and had to contend exclusively with it's customer base, SBD is capable of cutting out a middle man and manufacturing 100% of the line in house. They also have the luxury of appealing to the tool buying populis as a whole and even have the market presence to carve out a place if need be. This also tells us they likely don't intend to compete in the bargain barrel market.

 

2. They plan to utilize the Mac distribution system to broaden Craftsman's appeal. This tells us without question that they intend to touch on the Budget Pro Automotive market. Does this make Expert the sacrificial lamb? Maybe it does. Expert is the weakest brand in their portfolio and when it comes down to it, the most likely to be sacrificed. 

 

3. They plan to compete in the industrial sector. Craftsman had a presence in the budget Industrial market at various times and to varying degrees. They also have a lot of control in this market. Customers in this category aren't really brand chooses. They are using a supplier like Grainger or MSC and will buy what they offer if it meets price point. They aren't going to seek out Craftsman, but SBD has the muscle to give the brand market share if they do choose.

 

If we read between the lines, and believe that SBD will follow through on their plan, they've told us what the basic plan for Craftsman is. They will fill their gaps in the market with a tool of good enough quality to be manufactured at least partly in America, appeal to multiple levels of the market (mostly in the mid range), and we can safely assume they won't infringe on their cornerstone brands in doing so. We also know they will continue to be sold at Sears, so there's that too.

 

If they do these things, I feel pretty confident they will have done all that can be done in today's world to return Craftsman to it's traditional glory. Let us not forget, Craftsman was never a truly professional brand. It was a mid grade tool affordable enough for Joe Blow who changes his oil and fixes the garbage disposal, but quality enough to suffice for the guy who's starting out at the local service center. From what they're showing us, I think it's their plan to do so again.

 

For me the biggest question mark is Sears rearing the ability to develop tools. I mean, let's be honest, Sears sucks at this. I'll be interested to see what the real meaning behind this is.

 

There are a lot of variables we'll have to let play out. Who will be selling these at the retail level? We know Sears will. We presume Ace will, but who can really expand the market share to middle class America? There are 3 names that come to mind first. HD, Lowe's, and Wal-Mart. I think Lowe's is unlikely, HD maybe more likely than Lowe's, but still not all that likely. Wal-Mart on the other hand, has all the things I'm looking for and already has a huge relationship with SBD. If I'm SBD you can bet I'm looking at this and if I'm Wal-Mart, I'm at least toying with the idea. Maybe I'm totally wrong. But I just don't see how this can be anything but good for Craftsman. Could SBD really do any worse by the brand?

 

 

[JimboS1ice]

I would think the power tool line may disappear or end up another dewalt rebrand


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[Stercorarius]

5 hours ago, Conductor562 said:

 Could SBD really do any worse by the brand?

 

 

I sure as hell hope not. Some very good points that I didn't think of through the rest as well.

[WigWagWorkshop]

Maybe, just maybe, Craftsman Hand Tools, will be made in the USA again, with American Steel.. Well, one can wish, has my first set of wrenches, were American Made Craftsman, given to me by my brother.