Costco just bought up a logistics company from Sears' owner for $1 billion
- Costco bought logistics company Innovel Solutions from Sears' holding company for $1 billion, according to a statement published on the warehouse chain's website.
- Costco has been a client of Innovel since 2015.
- "We believe the acquisition will allow us to grow our e-commerce sales of 'big and bulky' items at a faster rate," Costco CEO Craig Jelinek said in a statement.
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Costco announced Tuesday that it bought logistics company Innovel Solutions from Transform Holdco, the holding company currently operating Sears and Kmart, for $1 billion.
In a press release published on the retailer's website, Costco described Innovel as providing its clients like Sears with "'final mile' delivery, complete installation and white glove capabilities for 'big and bulky' products across the United States and Puerto Rico."
Innovel was founded in 2014, according to the Hoffman Estates, Illinois-based firm's LinkedIn page. The company specializes in storing and moving items of all sizes, including furniture, large appliances, and even entire wine cellars. According to Costco's statement, Innovel's logistics network boasts coverage of 90% of the US and Puerto Rico and features 11 fulfillment centers containing 15 million feet of warehouse space. Innovel employs a workforce of over 1,500 people.
Writing back in 2015, Forbes contributor Steve Banker reported that Innovel was the "supply chain arm" for Sears Holding Company and served clients like the Air Force Exchange, the Navy Exchange, and former Sears brand Lands' End.
Costco has been a client of Innovel since 2015. But the big purchase doesn't mean that the logistics company will be severing ties with its old owners. Innovel will continue to work with Sears after the sale.
UBS predicted that Costco's latest acquisition - which comes out to $67 per square foot of retail space - will help the retailer "extend its reach." A note from the bank compared the move to building 100 new traditional Costco warehouses, and it predicted that the warehouse chain will accrue savings through owning Innovel that it will pass down onto members.
"We have had a great relationship with Innovel and share a philosophy of taking care of our members," Costco CEO Craig Jelinek said in a statement. "We believe the acquisition will allow us to grow our e-commerce sales of 'big and bulky' items at a faster rate."
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