Sears 2007 Annual Report Download - page 13

Kmart Sears Domestic Sears Canada
Discount
Stores
Super
Centers
Full-line
Mall
Stores
Sears
Essentials/
Grands
Specialty
Stores
Full-line
Stores
Specialty
Stores Total
Owned .................. 160 34 521 18 61 14 2 810
Leased .................. 1,167 21 339 57 238 107 86 2,015
Independently-owned and
operated stores .......... — — — — 851 — 171 1,022
Stores as of February 2, 2008 ..... 1,327 55 860 75 1,150 121 259 3,847
In addition, as of February 2, 2008, we had 40 domestic supply chain distribution centers, of which 10 are
owned and 30 are leased for terms ranging from one to 14 years. Of the total, 11 primarily support Kmart
locations, 25 primarily support Sears stores and four support both Sears and Kmart stores. In addition, we had
573 domestic store warehouses, customer call centers and service facilities (including 29 showrooms related to
our appliance builder/distributor business), most of which are leased for terms ranging generally from three to
five years or are part of other facilities included in the above table.
Our principal executive offices are located on a 200-acre site owned by us at the Prairie Stone office park in
Hoffman Estates, Illinois. The complex consists of six interconnected office buildings totaling approximately two
million gross square feet of office space.
In December 2005, we sold the former Kmart headquarters building in Troy, Michigan. We still own an
86,000 square foot office building in Troy, Michigan.
As of February 2, 2008, Sears Canada operated a total of 121 full-line stores, 259 specialty stores (48
furniture and appliance stores, 163 dealer stores operated under independent local ownership, 5 appliances and
mattresses stores, 30 Corbeil stores and 13 outlet stores), 37 floor covering stores, 1,826 catalog pick-up
locations and 106 travel offices.
In August 2007, Sears Canada sold its headquarters office building and adjacent land in Toronto, Ontario.
Sears Canada is currently leasing back the property under a leaseback agreement for a period up to 36 months,
and incurring its current level of occupancy costs, until it relocates all head office operations to currently
underutilized space in the Toronto Eaton Centre, Ontario.
A description of our leasing arrangements appears in Note 16 of Notes to Consolidated Financial
Statements.
Item 3. Legal Proceedings
Item 103 of SEC Regulation S-K requires that we disclose legal proceedings to which the Company and a
governmental authority is a party and that arise under laws dealing with the discharge of materials into the
environment or the protection of the environment, if the proceeding reasonably involves potential monetary
sanctions of $100,000 or more. Disclosure also is required as to any such proceedings known by us to be
contemplated by governmental authorities. In that connection, we note that we have received an administrative
subpoena from the District Attorney of the County of Ventura, California, seeking information and documents
primarily concerning our handling of hazardous waste in Ventura County and in California generally. We are
cooperating with California state and county authorities in connection with this matter. In addition, we are a party
to administrative actions brought by the California Air Resources Board (CARB) that allege that Kmart sold
certain non-food items (windshield wiper fluid and portable fuel containers) that do not comply with applicable
regulations. The parties are currently negotiating toward a resolution of this matter.
See Part II, Item 8, “Financial Statements—Notes to Consolidated Financial Statements,” Note 13—
“Bankruptcy Claims Resolution and Settlements,” and Note 20—“Legal Proceedings,” for additional information
regarding legal proceedings, which information is incorporated herein by this reference.
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