Within the last month, both Sears and Macy’s have sold long-established proprietary brands—Craftsman and Frango, respectively—to third parties. Their willingness to do so is yet another indication of how much the retail sector is struggling.
Sears has owned Craftsman since 1927, and the brand has been strongly associated with Sears in consumers’ minds ever since. (See Ira Mayer’s recent blog post on this subject.) But, in early January, the retailer sold Craftsman to Stanley Black & Decker for $525 million up front, plus $250 million at the end of the third year and a percentage of sales for 15 years.
Sears will continue to offer Craftsman products at its stores, but not exclusively. It had already been moving in that direction since 2010, expanding distribution to chains such as Ace Hardware and making the brand name available for licensing. It has taken the same path with its other well-known private labels, DieHard and Kenmore, and has said it is considering seeking buyers for those brands as well.
The specifics of the Frango situation are somewhat different, but the sale of the brand also marks the end of an era. In 1929, Chicago department store Marshall Field’s purchased a Seattle department store chain, Frederick & Nelson, and assumed ownership of the latter’s Franco candy brand as part of the transaction. Marshall Field’s made the candy, renamed Frango in 1934, in its Chicago flagship store for 70 years.
Marshall Field’s was sold to Dayton-Hudson in 1990 and the latter sold to Federated Stores in 2005, after which Marshall Field’s locations eventually turned into Macy’s outlets. Frango’s mints and other chocolate varieties became available nationally at Macy’s, but they were never as closely tied to the Macy’s name as they were to Marshall Field’s back in Chicago, where the two brands remain indelibly connected.
Earlier this week, Macy’s sold the Frango business to popcorn retailer Garrett Brands of Chicago. Macy’s will continue to operate the Frango Café in Chicago and sell the mints at 350 stores and online. The new owner has said it will not offer Frango products in its own Garrett Popcorn Shops, but it expects to expand distribution well beyond Macy’s.
Like many other retailers, both Sears and Macy’s are closing stores and laying off employees in the face of long-declining sales and financial losses. In their quest to survive, they have become resigned to divesting the proprietary brands that helped create their brand image, foster decades of customer loyalty, and differentiate them from the competition.
Comments are closed.