Sears Holdings Corp., owner of the Sears and Kmart retail chains, is considering the Washington area as a place to relocate its corporate headquarters, according to two people familiar with the company’s plans.
The company is one of more than 100 in Illinois with tax breaks that are scheduled to expire and last month suggested that it would considering leaving. It has reportedly been considering several states including Georgia, New Jersey, North Carolina and Texas.
Two weeks ago the company began to inquire about possible sites in the Washington area, according to the sources, who spoke on the condition of anonymity because they were not authorized by the company to discuss its plans.
If the company moves from the Chicago area, where it was founded as Sears, Roebuck and Co. in 1893, it would mean a colossal relocation of jobs. At its current headquarters in the Chicago suburb Hoffman Estates, Sears occupies 2.4 million square feet and employs 6,200 people. The numbers dwarf those of other high-visibility relocations to the Washington region, such as Northrop Grumman, which will employ about 300 people at a 333,000-square-foot building in Falls Church.
Sears spokeswoman Kimberly Freely said the company would not discuss a possible relocation. “Speculation about whether Sears will remain in Hoffman Estates is not fair to our associates, particularly so early in this process,” Freely said in a statement.
Sears Holdings has struggled to regain its footing as it emerges from the recession. It lost $170 million in the first quarter and last week it announced that it would lay off 700 Kmart employees from the chain’s appliance departments. In February, it named former IBM executive Lou D’Ambrosio as its new chief executive.
Yet despite declining sales, Sears Holdings remains one of the country’s largest retailers, with 4,038 Sears, Kmart and specialty stores in the United States and Canada at the end of last year. It was once headquartered in the iconic 110-story Sears Tower in downtown Chicago, now called the Willis Tower, until relocating to Hoffman Estates in 1992.
Sears was not the only company to threaten to leave Illinois after the state raised corporate tax rates recently, as both Caterpillar and CME Group made similar suggestions earlier this month.
Gov. Pat Quinn (D) has vowed to negotiate a deal to retain Sears, but Edward S. Lampert, the billionaire and chairman of Sears Holdings, has been highly critical of governments that he views as unfriendly to businesses. In a year-end letter to shareholders he wrote: “Increasing taxes and regulation creates uncertainty for private businesses and individuals, which is exactly what inhibits job creation in the first place and may even make it harder for employers to maintain current levels of employment.”