Sears Finalizes Store Acquisition With Kmart, Announces Wal-Mart Sites

Sears Acquires a Total of 56 New Stores

Sears, Roebuck and Co. (NYSE: S) today announced that the company has closed the acquisition of ownership or leasehold interest in 50 stores from Kmart Holding Corporation (NASDAQ: KMRT) for $575.9 million. Sears has paid 30 percent of the overall purchase price for these properties, with the remaining 70 percent to be paid upon Sears taking possession of the stores.

The newly acquired stores are located primarily in large, densely populated markets with home, family and income demographics that are attractive to Sears. Sears will take possession of the stores in spring 2005 and the majority of the stores are expected to be converted by fourth quarter 2005 to Sears nameplates.

As part of the initial announcement on June 30, Sears also said it would acquire additional off-mall locations from Wal-Mart. Sears will make lease payments to Wal-Mart under subleases for six Wal-Mart stores. These stores are located in mid-size markets that fit well into Sears' market and demographic profile.

With this transaction, Sears is doubling its total number of stores in San Diego, adding five new stores to the New Jersey market and significantly increasing the total number of stores in key markets including Florida, the Northeast and Puerto Rico.

"The completion of this transaction moves Sears another step closer to its strategic goal of growing our store base and the Sears brand off-mall," said Alan Lacy, Sears chairman and CEO. "We look forward to an increased presence in these key markets and serving new and existing customers."

Representing the largest full-line store growth in company history, these new stores give Sears stronger presence in markets where the opportunities to find sites for store growth would be limited. "Opening more doors in these strategically selected locations allows Sears to compete more effectively and operate in areas closer to the customer," said Jerry Post, senior vice president, Sears off-mall strategy. "With these new locations, plus the Sears Grand stores already in development, we will quickly open more doors and dramatically boost our off-mall retail presence in attractive markets," added Post.

A New, Mid-sized Store Format

A Sears store at its core, the new mid-sized format will provide customers with traditional Sears product categories, such as apparel, home appliances, home electronics, home improvement and home fashions, plus consumables and transactional items. The floor design of the new stores will be on one level, utilizing an open racetrack design with exit cashiering at the door -- a common off-mall layout similar to that of Sears Grand stores.

As Sears begins looking to staff these new stores, the company plans to provide Kmart associates at these locations an opportunity to be considered for employment with Sears.

  The locations of the former Kmart and Wal-Mart locations are as follows:

                          K-Mart Stores
   10140 N 91St Avenue          Peoria            AZ

   705 N Main St                Corona            CA
   3610 Peck Road               El Monte          CA
   2505 El Camino Real          Tustin            CA
   12080 Carmel Mountain        San Diego         CA
   5405 University Avenue       San Diego         CA
   7655 Clairemont Mesa         San Diego         CA
   4330 Camino De La Pl         San Ysidro        CA
   935 Sweetwater Rd            Spring Valley     CA

   100 Main Street North        Southbury         CT

   15271 33 Mc Gregor B         Ft Myers          FL
   15201 N Cleveland S          North Ft Myers    FL
   1363 Nw St Lucie W B         Port St Lucie     FL
   3020 Se Federal Hwy          Stuart            FL
   5750 Nw 183Rd Street         Hialeah           FL
   4560 Forest Hill Blv         West Palm Beach   FL
   4717 S Florida Ave           Lakeland          FL
   9500 9Th Street N            St Petersburg     FL

   94 - 825 Lumiaina St         Waipahu           HI

   13200 South Cicero           Crestwood         IL
   537 N Hicks Road             Palatine          IL
   840 Plainfield               Willowbrook       IL

   4915 Dixie Hwy               Louisville        KY

   10 Main St                   Tewksbury         MA

   8827 Woodyard Road           Clinton           MD
   8829 Greenbelt Road          Greenbelt         MD
   6411 Riggs Road              Hyattsville       MD

   1100 Rochester Rd South      Rochester         MI
   19800 West Rd                Woodhaven         MI

   10 W Lake Street             Minneapolis       MN

   New Hampshire
   5 Garden Lane                Londonderry       NH
   375 Amherst Street B         Nashua            NH
   480 West Street              Keene             NH

   New Jersey
   180 Broadway                 Elmwood Park      NJ
   733 Route 72 East            Manahawkin        NJ
   808 Route 46                 Parsippany        NJ
   24 34 Barbour Avenue         Passaic           NJ
   6801 Hadley Rd               South Plainfield  NJ
   250 New Road Rte 9           Somers Point      NJ
   235 Prospect Avenue          West Orange       NJ

   New York
   810 Paul Rd                  Rochester         NY
   1000 Montauk Highway         West Babylon      NY

   1105 North Court Str         Medina            OH

   3843 Linden Street           Bethlehem         PA

   Puerto Rico
   Ave Jesus T Pinero 4         Cayey             PR
   State 149 And State          Juana Diaz        PR
   Carr Estatal Number          Vega Alta         PR
   601 Yauco Plaza              Yauco             PR

   482 Mcbrien Rd               East Ridge        TN

   141 West Lee Hwy             Warrenton         VA

                          Wal-Mart Stores
   4551 University Dr.          Evansville-West   IN

   7904 S 83rd St.              La Vista          NE

   9365 Fields Ertel Rd.        Cincinnati        OH

   South Carolina
   7501-A Garners Ferry Rd.     Columbia          SC

   393 E. Main St. (Rt 31 E)    Hendersonville    TN

   3315 Court St.               Pekin             IL

  About Sears

Sears, Roebuck and Co. is a leading broadline retailer providing merchandise and related services. With revenues in 2003 of $41.1 billion, the company offers its wide range of home merchandise, apparel and automotive products and services through more than 2,300 Sears-branded and affiliated stores in the U.S. and Canada, including approximately 1,000 full-line stores and 1,300 specialty stores. Sears also offers a variety of merchandise and services through,, and specialty catalogs. Sears is the only retailer where consumers can find each of the Kenmore, Craftsman, DieHard and Lands' End brands together - among the most trusted and preferred brands in the U.S. The company is the largest provider of product repair services with more than 14 million service calls made annually.

Forward-Looking Statements

This release makes certain statements regarding the acquisition, conversion, and opening of the Kmart and Wal-Mart stores acquired by Sears, the company's strategy for growth, and the impact of the new stores on Sears presence in certain local markets. These statements are "forward-looking statements" based on assumptions about the future, which are subject to risks and uncertainties, such as competitive conditions in retail; changes in consumer confidence and spending; the successful execution of and customer reactions to the company's strategic initiatives, including the conversion of the Kmart and Wal-Mart stores and other new store locations into Sears stores, which will involve significant construction activity, hiring and training of personnel and obtaining various consents and approvals; Sears' ability to operate the new stores successfully and integrate the new stores into the Sears infrastructure, which involves leveraging the supply chain and consolidating expenses; anticipated cash flow; the possibility that the company will identify new business and strategic options for one or more of its business segments, potentially including selective acquisitions, dispositions, restructurings, joint ventures and partnerships; Sears' ability to successfully merchandise the new stores with Sears branded merchandise, including Lands' End merchandise; social and political conditions such as war, political unrest and terrorism or natural disasters; general economic conditions and normal business uncertainty. The company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information

SOURCE: Sears, Roebuck and Co.

CONTACT: Chris Brathwaite, +1-847-286-4681, or Corinne Gudovic,
+1-847-286-3226, or Investors, Scott A. Bohaboy, +1-847-286-7419, all of
Sears, Roebuck and Co.

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