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What You Need to Know About the Craftsman Sale to Black & Decker

You may be able to buy more U.S.-made tools, but the deal could also lead to warranty headaches.
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Sears is selling its Craftsman hardware brand to Stanley Black & Decker in a deal that will change the way the iconic brand is manufactured, marketed, and sold.

While the sale was announced on January 5, those changes won't go into effect right away. When the deal closes, the only immediate change is that Stanley Black & Decker will own Craftsman sales in non-Sears retailers.

But significant changes lie ahead for Craftsman, including those that could cause warranty issues and affect where your tools are made.

Soon, Not All Craftsman Tools Will Be Alike

Sears gets $525 million when the deal closes, another $250 million three years later, and roughly 3% of all Stanley Black & Decker Craftsman sales for the next 15 years. Sears will also score a royalty-free license to source and sell Craftsman products for 15 years, essentially maintaining Sears' Craftsman status quo.

Stanley Black & Decker, meanwhile, gains the Craftsman brand and the existing revenue from non-Sears retailers, like Ace Hardware. Sears' royalty-free license expires in 2032, and Sears will owe Stanley Black & Decker 3% of any subsequent Craftsman sales.

The deal is expected to close in 2017, and is subject to regulatory approval.

Remember, Sears Never Actually Manufactured Craftsman

One thing is critical to understanding the deal: Sears does not own any Craftsman factories. Instead, like many companies, Sears works with dozens of manufacturing partners to create Craftsman-branded products. Tool enthusiasts have devoted countless hours to deciphering date codes and manufacturing codes, as country of origin is a concern for many customers.

Many of Craftsman's suppliers were once based in the U.S., but much of the production has moved overseas in the last decade.

Many of Craftsman's suppliers — particularly the hand tool manufacturers — were once based in the U.S., but much of the production has moved overseas in the last decade.

Made in the USA (Again)

Craftsman customers disappointed by Sears' overseas manufacturing may be happy to learn that Stanley Black & Decker intends to invest heavily in making Craftsman tools in the states again.

Stanley Black & Decker CEO and President Jim Loree told investors that while the "very short-term" likely won't see a supplier change, the company intends to invest $80 million in Craftsman production.

SEE ALSO: 5 Power Tools That Every Home Should Have

"For new outlets and retail outlets outside of Sears, Stanley Black & Decker plans to expand our manufacturing capacity in the U.S., specifically to support the growth of the Craftsman brand," said Shannon Lapierre, vice president of communications at Stanley Black & Decker, in an interview with DealNews.

That expansion includes $35 million to open a new Craftsman production facility in the United States, although Lapierre said specifics were still being worked out, and no location for the plant had yet been announced. The remaining $45 million is planned for "capacity increases," Loree told investors.

Possible Warranty Complications Ahead

While Stanley Black & Decker intends to make many Craftsman products in the U.S., both Stanley Black & Decker representatives and Howard Riefs, corporate communications director at Sears Holdings, confirmed to DealNews that Sears will continue to use its existing suppliers.

"Sears Holdings will continue to offer Craftsman-branded products that we source from our existing suppliers for sale at Sears, Kmart, and Sears Hometown Outlets," Riefs wrote in an email.

As the two companies start to produce tools in different countries and factories, warranty replacement concerns could emerge.

Sears and Stanley Black & Decker representatives both told DealNews their companies intend to honor the Craftsman lifetime warranty.

According to Riefs, a customer would still redeem other warranties at "the retailer where they purchased the product, or at the Craftsman Customer Service online and phone support." However, the "lifetime warranty will be honored at all locations that sell Craftsman."

In fact, Sears and Stanley Black & Decker representatives both told DealNews their companies intend to honor the Craftsman lifetime warranty.

Thus, a customer who goes to Sears seeking replacement of a faulty U.S.-made Stanley Black & Decker Craftsman wrench will get warranty service — but may receive a tool made by a different supplier in a different country.

The agreement between the two companies states that Sears' Craftsman products must meet minimum quality standards, Don Allan, Stanley Black & Decker's Executive Vice President and CFO, told investors. But many consumers value country of origin, especially in the tool market.

Competitive Retail Expansion on the Horizon

In the investor call announcing the transaction, Loree stated that Stanley Black & Decker will be expanding the number of channels in which it sells Craftsman. Lapierre told DealNews there weren't any specific plans to announce right now, but that plans included big-box retailers, online sales, and "mobile," referring to the tool trucks that visit professional mechanics.

There isn't a pricing agreement or minimum-advertised-pricing deal in place between Sears and Stanley Black & Decker, according to Loree, so expect to find Craftsman products at varying prices at different retail outlets.

SEE ALSO: 5 Common Warranty Pitfalls (And How to Avoid Them)

That pricing flexibility will likely be important in the fiercely competitive tool and hardware landscape. The Craftsman lifetime warranty once set this brand apart, but competitors like Harbor Freight Tools, Home Depot's Husky brand, and Lowe's Kobalt brand offer similar warranties, often at lower prices and with competitive features.

More Than Just Hand Tools

Craftsman is known for its hand tools, but its lineup contains much more. Per the Stanley Black & Decker investor presentation, roughly 40% of Craftsman sales are lawn and garden items, and another 25% are storage and related products — toolboxes, garage door openers, and so on.

Readers, what do you think? Are you excited about Stanley Black & Decker bringing Craftsman back to the states? Do the potential warranty issues concern you? Let us know in the comments!


Contributing Writer

Sean is a freelance writer and photojournalist working in the Hampton Roads region. He has been a writer, adventure motorcyclist, drag racer, data nerd, shade-tree mechanic, and tornado chaser. Recommend good beers to him on Twitter at @wxgeek.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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10 comments
Enough-enough-ENOUGH
First off, warranty shmarranty. Almost EVERY hand tool sold in the U.S.over the last 15 years has it! It's a farce, cheap marketing strategy. Of the 5% or so of hand tools that DO end up actually getting replaced, it's not even worth the ink for most companies to write in the books.
I just went through (and lost) a post- divorce lost/stolen property hearing and her attorney introduced an ad for a COMPLETE Craftsman socket set for $199 as opposed to the $300 or so I was asking for in used sockets, not even a full set of all drive sizes. I told the court straight out that my 45 year old Craftsman sockets were far better than any of the junk Crapsman has sold in the last 15 years (guess the judge didn't buy it though). Out a lifetime of tools, don't get married unless you value your wife over your tools NO MATTER WHAT! IMHO..
Mk10
This is the best thing that could happen to the Craftsman brand name. Stanley Black & Decker (SWK) has taken B & D from the shadow of its former self to a lower-priced line of tools that work, have a good warranty, and are starting to get decent user reviews. SWK also just bought controlling interest in the their own factory in China that they can control for manufacturing and production, chooses overseas manufacturers wisely (unlike Sears over the last 15-20 years), wants to bring Craftsman hand tool production back to the US, and has fantastic customer service, not to mention top-flight upper management who actually know what's going on in the real world. SWK will make Craftsman tools worthy of the marque again, instead of examples of what the lowest-common-denominator bid could produce.
Mk10
This is the best thing that could happen to the Craftsman brand name. Stanley Black & Decker (SWK) has taken B & D from the shadow of its former self to a lower-priced line of tools that work, have a good warranty, and are starting to get decent user reviews. SWK also just bought controlling interest in the their own factory in China that they can control for manufacturing and production, chooses overseas manufacturers wisely (unlike Sears over the last 15-20 years), wants to bring Craftsman hand tool production back to the US, and has fantastic customer service, not to mention top-flight upper management who actually know what's going on in the real world. Hell, SWK will make Craftsman tools worthy of the marque again, instead of examples of what the lowest-common-denominator bid could produce.
BlueOak
Craftsman tools have been total crap for a decade or longer. The only way to buy them now is when they're virtually free via the silly Sears "Shop" points... or when you find 20-30 year old really good Craftsman tools at estate sales - those were solid tools.

What doesn't make sense from Stanley B&D's perspective... how in the heck are they going to restore the historical higher quality image of Craftsman when with this deal they've allowed Sears to continue to make ever crappier and crappier Craftsman tools the existing Sears way in parallel???

Makes no sense. One would think Stanley B&D would have been smarter. Didn't B&D take full control of GE's countertop appliances when they bought them?
BlueOak
Haha! "...Sears will also score a royalty-free license to source and sell Craftsman products for 15 years..."

So Sears actually believes the 'longest bankruptcy going out of business sale in US history' is going to run *another* 15 longggg years? Lol.
Al-in-SoCal
It is so sad what has happened to Sears during the past decade. My mom retired from there, and I don't even want to tell her about the Craftsman sale - she's not a newshound.

We went to Sears to buy her an adjustable bed - $3K - very nice. The delivery came in days late, and then the bed was damaged - as told by the delivery crew. Then trying to reschedule they told her that SHE cancelled the bedframe order?!? I went online & bought it at Bed, Bath & Beyond for $400 less + $300 rebate - and it was delivered ON TIME. Needless to say she was sad about the ordeal ... very sad indeed.
ray62
this is likely going to be bad for black& Decker unless they bring the price way down to compete with other tools. Some of the other brands have dropped their price to about half of craftsman and have the lifetime warranty and these tools have as good or better quality.
fcastro
Are you kidding me? Even if craftsman tools are being made all over the place, they are leaps and bounds above black and decker. B&d now owns most tool brands including Dewalt. Regardless B&d tools are the bottom of the barrel. There power tools and batteries are total garbage.
joe1512
This is an odd move. Who considers Craftsman products to be any better than black and decker anymore? They are all cheaply made in china nowdays.
I fail to see how B&D gains much from acquiring the greatly-diminshed Craftsman brand.
CinciShopper
This deal doesn't honestly do anything for me. I have plenty of Craftsman tools but then again I have plenty "decent" quality Kobalt tools as well.

20 years ago there was a huge difference between say a Craftsman tool and brand X but not so much anymore. The off brands have gotten a lot better and Craftsman have gotten junkier.

In my opinion Black & Decker already makes better hand power tools than the Craftsman ones and that ain't saying much.

If you want top shelf "quality tools" buy Snap-On tools but then again who wants to pay those prices.
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