Washington based retail company Costco recently announced the acquisition of Innovel Solutions from the holding company currently managing retail brands Sears and Kmart, Transform Holdco.
Reportedly, the transaction was valued at USD 1 billion and marks the largest acquisition made by Costco since its merger with Price Club in the year 1993.
Citing reliable sources, Innovel Solutions is the supply chain arm of the American retail firm – Sears Holding Corporation and its customer base includes the Navy Exchange, former Sear’s brand Land’s End and the Air Force Exchange.
For the record, Costco has been a client of Innovel since 2015 and will continue to work with Sears even after the purchase.
Innovel currently operates with nearly 1,500 employees across 11 distribution facilities and close to 100 final-mile stores. The entity focuses on delivering and installing large items like mattresses, furniture, and appliances.
Apparently, the transaction which is valued at US$67 per square foot of retail space will enable the retail brand to expand its global footprint. In order to meet the rising customer demands, Costco aims at setting up 100 new warehouses and the chain will draw savings through the ownership of Innovel which will be passed down to the members.
As per Craig Jelinek, CEO, Costco, through the purchase the company wishes to expand its online sale of heavy items at an accelerated pace.
Established in 1963, Costco or Costco Wholesale Corporation is primarily a discount store type in which bulk volume of merchandise are sold at heavy discounts to club members who pay an annual membership charge. Most Costco stores also comprise of ancillary businesses such as gas stations and pharmacies. Currently, the company operates stores across Canada, Mexico, Europe, the United States, and Australia.