Costco acquisition of Innovel Solutions : US warehouse clubs chain Costco Wholesale Corporation has acquired Innovel Solutions, a provider of third-party end-to-end logistics solutions for $1 billion from Transform Holdco (TFCO), the operator of the Sears and Kmart stores.
For several years, Innovel Solutions has provided US department store chain Sears and, more recently, third parties with final mile delivery, complete installation, and white glove capabilities for big and bulky products in the US and Puerto Rico.
The network of the logistics solutions provider offers coverage to approximately 90% of the US and Puerto Rico.
Products served vial Innovel Solutions are major appliances, furniture, televisions, grills, mattresses, patio, wine cellars, and fitness equipment.
The US logistics solutions provider has more than 1,500 people and 11 distribution/fulfillment centers and 100 plus final-mile cross-dock centers. Innovel Solutions is said to have more than 15 million square feet of warehouse space apart from its dedicated call centers.
Costco has been a customer of the logistics solutions provider for the last five years or so.
Craig Jelinek – Costco CEO, commenting on Costco acquisition of Innovel Solutions, said: “We have had a great relationship with Innovel and share a philosophy of taking care of our members. We believe the acquisition will allow us to grow our Ecommerce sales of “big and bulky” items at a faster rate.”
Costco said that the logistics solutions provider will continue to serve Sears and its other third party customers.
Transform Holdco said that the transaction will give Innovel Solutions and its workforce the resources to continue to build out a best-in-class logistics platform. For the retail holding company, the proceeds from the sale of the logistics solutions provider will help it to repay all of its non-real estate debt.
The deal also gives scope to Transform Holdco to pursue other transformative steps to leverage fully its core assets and capabilities to achieve maximum value for all stakeholders.
Transform Holdco, in a statement on Costco acquisition of Innovel Solutions, stated: “Over the past year, during an extremely challenging retail environment, TFCO’s associates have worked tirelessly to restore vendor relationships and to maintain financial support from its lenders with a focus to return the company’s retail operations to profitability.
“Despite these efforts, the support TFCO received fell well short of its needs. As a result, the Sears and Kmart store formats have experienced declining sales and continued losses, consistent with trends for department store and other legacy retailers.”