Sears World Trade Inc., seeking to acquire a large marketing base in Europe and Asia, announced Friday that it has reached a tentative agreement to buy 75 percent of the European, North American and East Asian trading operations of Hagemeyer, N.V., a large, general trading company with headquarters in the Netherlands.
Sears World Trade, a Washington-based subsidiary of Sears, Roebuck & Co., also said it is proposing to acquire a 20 percent stake in the remaining operations of Hagemeyer, including its Southeast Asian trading operations.
"This will give us the operational capability we need" to become a full-fledged trading company that can distribute consumer products worldwide, said Frank C. Carlucci, chairman and chief executive officer of Sears World Trade.
"At Sears World Trade, we have good sourcing and product capability and good specialized skills, such as consulting, but we don't have a distribution network on the ground, complete with customer base. This completes the final equation for us," he said.
Sears officials said it would have been difficult for the company to achieve the same distribution network from scratch.
The 80-year-old Hagemeyer company distributes brand-name consumer goods worldwide, including items made by Polaroid, Panasonic, Triumph, Christian Dior and Olympus. Company revenue totaled $840 million last year.
Carlucci noted that the acquisition is a good fit for the money-losing Sears World Trade. The company has been trying to reposition itself from an intricate international trading company -- arranging the development and manufacturing of goods as well as selling them -- into a general trading company that primarily distributes consumer goods here and abroad.
The company has come a long way in "cutting our losses," Carlucci said. However, he noted the company still has a way to go before being profitable. For the first half of the year, Sears World Trade lost $4.9 million on revenue of $105 million. The loss was half the $10.1 million loss incurred during the same period last year, when the company's revenue totaled $73.8 million.
The acquisition, which is estimated to cost about $25 million, is expected to be completed over the next several months.