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Sears to spin off Orchard Supply Hardware chain

This post has been corrected. See the note at the bottom for details.

Sears Holdings Corp. plans to spin off its home improvement unit, Orchard Supply Hardware, as a separate publicly traded company, the department store giant said Thursday.

Known as OSH, Orchard Supply Hardware is a San Jose-based chain that operates 89 stores, all of them in California. OSH reported a profit of $8.7 million on $660.7 million in revenue in fiscal 2010.

The chain plans to be traded as OSHS on the Nasdaq once Sears Holdings, its parent company since 1996, spins it off as a standalone company.

Significantly smaller than its national big-box rivals Home Depot and Lowe's, OSH began in the 1930s as a purchasing cooperative by orchardists selling picking pails and ladders, according to the San Jose Mercury News. In the 1950s, it became a general retailer and has gone through several ownership changes since.

Sears Holdings said in a filing with the Securities and Exchange Commission that it believed OSH would generate more value for shareholders as an independent company. The company did not list a target price for the stock and said the spin-off, expected to go to market in the fall, still needed final approval from its board of directors.

[For the Record, 11 a.m. June 24: A previous version of this post referred to the spin-off as an IPO. Instead, current Sears shareholders will be issued shares of the new Orchard Supply.]

-- Andrea Chang

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