Filing Details

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 20)*

 

 

Sears Hometown and Outlet Stores, Inc.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

812362101

(CUSIP Number)

Janice V. Sharry, Esq.

Haynes and Boone, LLP

2323 Victory Avenue, Suite 700

Dallas, Texas 75219

(214) 651-5000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 27, 2019

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

CUSIP No. 812362101

 

1.		Names of Reporting Persons.   ESL Partners, L.P.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☒        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   Delaware

Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   3,870,336
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   3,870,336
				10.		Shared Dispositive Power   8,569,873

11.		Aggregate Amount Beneficially Owned by Each Reporting Person   12,440,209
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   54.8% (1)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)	Based upon 22,702,132 shares of Common Stock outstanding as of June 21, 2019, as disclosed in the Issuers Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2019 that was filed by the Issuer with the Securities and Exchange Commission on June 21, 2019.

CUSIP No. 812362101

 

1.		Names of Reporting Persons.   RBS Partners, L.P.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☒        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   Delaware

Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   3,870,336
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   3,870,336
				10.		Shared Dispositive Power   8,569,873

11.		Aggregate Amount Beneficially Owned by Each Reporting Person   12,440,209
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   54.8% (1)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)	Based upon 22,702,132 shares of Common Stock outstanding as of June 21, 2019, as disclosed in the Issuers Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2019 that was filed by the Issuer with the Securities and Exchange Commission on June 21, 2019.

CUSIP No. 812362101

 

1.		Names of Reporting Persons.   ESL Investments, Inc.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☒        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   Delaware

Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   3,870,336
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   3,870,336
				10.		Shared Dispositive Power   8,569,873

11.		Aggregate Amount Beneficially Owned by Each Reporting Person   12,440,209
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   54.8% (1)
14.		Type of Reporting Person (See Instructions)   CO

 

(1)	Based upon 22,702,132 shares of Common Stock outstanding as of June 21, 2019, as disclosed in the Issuers Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2019 that was filed by the Issuer with the Securities and Exchange Commission on June 21, 2019.

CUSIP No. 812362101

 

1.		Names of Reporting Persons.   Edward S. Lampert
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☒        (b)  ☐
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO; PF
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)   ☐
6.		Citizenship or Place of Organization   United States

Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   12,440,209
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   3,870,336
				10.		Shared Dispositive Power   8,569,873

11.		Aggregate Amount Beneficially Owned by Each Reporting Person   12,440,209
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   54.8% (1)
14.		Type of Reporting Person (See Instructions)   IN

 

(1)	Based upon 22,702,132 shares of Common Stock outstanding as of June 21, 2019, as disclosed in the Issuers Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2019 that was filed by the Issuer with the Securities and Exchange Commission on June 21, 2019.

This Amendment No. 20 to Schedule 13D (this Amendment No. 20) relates to shares of common stock, par value $0.01 per share (the Common Stock), of Sears Hometown and Outlet Stores, Inc., a Delaware corporation (the Issuer). This Amendment No. 20 amends the Schedule 13D, as previously amended, filed with the Securities and Exchange Commission by ESL Partners, L.P., a Delaware limited partnership (Partners), RBS Partners, L.P., a Delaware limited partnership (RBS), ESL Investments, Inc., a Delaware corporation (ESL), and Edward S. Lampert, a United States citizen, by furnishing the information set forth below. Except as otherwise specified in this Amendment No. 20, all previous Items are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Schedule 13D, as previously filed with the Securities and Exchange Commission (SEC).

Item 4. Purpose of Transaction.

Item 4 is hereby amended and supplemented as follows:

On August 27, 2019, the Issuer entered into an Equity and Asset Purchase Agreement (the Purchase Agreement) with Franchise Group Newco S, LLC (Purchaser) and Liberty Tax, Inc. (solely for purposes of a performance and payment guarantee on behalf of Purchaser), providing for an Outlet Sale pursuant to the previously-announced Merger Agreement, dated as of June 1, 2019, among the Issuer, Transform Holdco and Merger Sub.

Concurrently with the entry into the Purchase Agreement, the Issuer, Transform Holdco and Merger Sub entered into a letter agreement (the Outlet Letter Agreement), which provides that the Merger will, subject to the satisfaction of certain conditions, close (the Merger Closing) substantially concurrently with the closing of the Outlet Sale (the Outlet Closing and together with the Merger Closing, the Closings) and also addresses certain other matters relating to the terms of the Merger Agreement. Pursuant to the terms of the Purchase Agreement and the Outlet Letter Agreement, the concurrent Closings will not occur prior to October 11, 2019. In addition, Transform Holdco has the right under the Outlet Letter Agreement to defer the Merger Closing by up to 7 business days upon written notice to the Issuer, in which case the Issuer shall exercise its right under the Purchase Agreement to defer the Outlet Closing by the same number of business days. The Closings are expected to occur in October 2019, subject in each case to the satisfaction of the conditions thereto.

In connection with the Issuers entry into the Purchase Agreement, Partners and Mr. Lampert executed and delivered to the Issuer a written consent (the Outlet Written Consent) confirming Partners and Mr. Lamperts approval of an Outlet Sale consummated in all material respects in accordance with the terms set forth in the Purchase Agreement, to the extent such sale constitutes a sale of substantially all of the Issuers property and assets and is subject to the stockholder approval requirements of Section 271(a) of the General Corporation Law of the State of Delaware.

The foregoing description of the Outlet Letter Agreement, the Outlet Written Consent and the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Outlet Letter Agreement, the Outlet Written Consent and the Purchase Agreement attached hereto as Exhibit 99.16, Exhibit 99.17 and Exhibit 99.18, respectively, and incorporated by reference herein.

Through open market sales on August 23, 2019, Partners divested beneficial ownership for purposes of Section 13(d) of the Act of an aggregate of 95,470 shares of Common Stock that were held in the Liability Accounts controlled by Partners or its designee that were established on behalf of, and for the benefit of, those Redeeming Limited Partners that previously redeemed all of their interest in Partners in lieu of Partners withholding a reasonable reserve from the amounts that would have otherwise been distributable to such Redeeming Limited Partners for the purpose of satisfying the relevant Redeeming Limited Partners share of any contingent liabilities of, or claims against, Partners. These divestures of Common Stock were made at the direction and for the benefit of these Redeeming Limited Partners.

Item 5. Interest in Securities of the Issuer.

Item 5 is hereby amended and restated in its entirety as follows:

(a)-(b) Each Reporting Person declares that neither the filing of this Schedule 13D nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, the beneficial owner of any securities covered by this Schedule 13D.

Each Reporting Person may be deemed to be a member of a group with respect to the Issuer or securities of the Issuer for the purposes of Section 13(d) or 13(g) of the Act. Each Reporting Person declares that neither the filing of this Schedule 13D nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the Issuer or otherwise with respect to the Issuer or any securities of the Issuer or (ii) a member of any syndicate or group with respect to the Issuer or any securities of the Issuer.

As of August 28, 2019, the Reporting Persons may be deemed to beneficially own the shares of Common Stock of the Issuer set forth in the table below.

 

REPORTING PERSON		NUMBER OF SHARES BENEFICIALLY OWNED				PERCENTAGE OF OUTSTANDING SHARES				SOLE VOTING POWER				SHARED VOTING POWER				SOLE DISPOSITIVE POWER				SHARED DISPOSITIVE POWER
ESL Partners, L.P.			12,440,209	(1)(2)			54.8	% (3)			3,870,336	(2)			0				3,870,336	(2)			8,569,873	(1)
RBS Partners, L.P.			12,440,209	(1)(2)			54.8	% (3)			3,870,336	(2)			0				3,870,336	(2)			8,569,873	(1)
ESL Investments, Inc.			12,440,209	(1)(2)			54.8	% (3)			3,870,336	(2)			0				3,870,336	(2)			8,569,873	(1)
Edward S. Lampert			12,440,209	(1)(2)			54.8	% (3)			12,440,209	(1)(2)			0				3,870,336	(2)			8,569,873	(1)

(1)

This number includes 8,569,873 shares of Common Stock held by Mr. Lampert. Partners has entered into the Lock-Up Agreement with Mr. Lampert that restricts the purchase and sale of securities held by Mr. Lampert. Pursuant to the Lock-Up Agreement, Partners may be deemed to have shared dispositive power over, and to indirectly beneficially own, securities owned by Mr. Lampert. RBS, ESL and Mr. Lampert may also be deemed to have shared dispositive power over, and to indirectly beneficially own, such securities.

(2)

This number includes 3,864,516 shares of Common Stock held by Partners and 5,820 shares of Common Stock held in the Liability Accounts controlled by Partners. RBS is the general partner of, and may be deemed to indirectly beneficially own securities beneficially owned by, Partners. ESL is the general partner of, and may be deemed to indirectly beneficially own securities beneficially owned by, RBS. Mr. Lampert is the Chairman, Chief Executive Officer and Director of, and may be deemed to indirectly beneficially own securities beneficially owned by, ESL.

(3)	This is based upon 22,702,132 shares of Common Stock outstanding as of June 21, 2019, as disclosed in the Issuers Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2019 that was filed by the Issuer with the Securities and Exchange Commission on June 21, 2019.

(c) Other than as set forth on Annex B, there have been no transactions in the class of securities reported on that were effected by the Reporting Persons during the past sixty days or since the most recent filing of Schedule 13D, whichever is less.

(d) Not applicable.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended and supplemented as follows:

The information set forth in Item 4 of this Amendment No. 20 is incorporated by reference into this Item 6.

Item 7. Material to be Filed as Exhibits.

Item 7 is hereby amended and restated in its entirety as follows:

The following exhibits are filed as exhibits hereto:

 

Exhibit		Description of Exhibit
99.2		Letter Agreement, dated June 2, 2010, by and between ESL Partners, L.P. and Edward S. Lampert (incorporated by reference to Exhibit 99.2 to the Schedule 13D relating to the Common Stock of the Issuer filed on September 12, 2012 by the Reporting Persons, SPE I Partners, LP, SPE Master I, LP, ESL Institutional Partners, L.P., RBS Investment Management, L.L.C. and CRK Partners, LLC with the Securities and Exchange Commission).
99.6		Joint Filing Agreement (incorporated by reference to Exhibit 99.6 to the Schedule 13D relating to the Common Stock of the Issuer filed on January 5, 2016 by the Reporting Persons with the Securities and Exchange Commission).
99.7		Letter from Transform Holdco LLC to the Board of Directors of Sears Hometown and Outlet Stores, Inc., dated April 5, 2019 (incorporated by reference to Exhibit 99.7 to the Schedule 13D relating to the Common Stock of the Issuer filed on April 8, 2019 by the Reporting Persons with the Securities and Exchange Commission).
99.8		Action by Written Consent of Stockholders of Sears Hometown and Outlet Stores, Inc., dated April 15, 2019 (incorporated by reference to Exhibit 99.8 to the Schedule 13D relating to the Common Stock of the Issuer filed on April 15, 2019 by the Reporting Persons with the Securities and Exchange Commission).

99.9		Letter from ESL Investments, Inc. to the Board of Directors of Sears Hometown and Outlet Stores, Inc., dated April 15, 2019 (incorporated by reference to Exhibit 99.9 to the Schedule 13D relating to the Common Stock of the Issuer filed on April 15, 2019 by the Reporting Persons with the Securities and Exchange Commission).
99.10		Letter from ESL Investments, Inc. to the Stockholders of Sears Hometown and Outlet Stores, Inc., dated April 15, 2019 (incorporated by reference to Exhibit 99.10 to the Schedule 13D relating to the Common Stock of the Issuer filed on April 15, 2019 by the Reporting Persons with the Securities and Exchange Commission).
99.11		Agreement and Plan of Merger, dated June 1, 2019, by and among Sears Hometown and Outlet Stores, Inc., Transform Holdco LLC and Transform Merger Corporation (incorporated by reference to Exhibit 2.1 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on June 3, 2019).
99.12		Action by Written Consent of ESL Partners, L.P. and Edward S. Lampert, dated June 1, 2019 (incorporated by reference to Exhibit 99.1 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on June 3, 2019).
99.13		Equity Commitment Letter, dated June 1, 2019, by and between ESL Investments, Inc. and Transform Holdco LLC (incorporated by reference to Exhibit 99.13 to the Schedule 13D relating to Common Stock of the Issuer filed on June 3, 2019 by the Reporting Persons with the Securities and Exchange Commission.)
99.14		Letter Agreement, dated June 1, 2019, by and between Edward S. Lampert and Sears Hometown and Outlet Stores, Inc. (incorporated by reference to Exhibit 2.2 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on June 3, 2019).
99.15		Press Release, dated June 3, 2019 (incorporated by reference to Exhibit 99.2 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on June 3, 2019).
99.16		Letter Agreement, dated August 27, 2019, by and among Sears Hometown and Outlet Stores, Inc., Transform Holdco LLC and Transform Merger Corporation (incorporated by reference to Exhibit 2.3 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on August 27, 2019).
99.17		Action by Written Consent of ESL Partners, L.P. and Edward S. Lampert, dated August 27, 2019 (incorporated by reference to Exhibit 2.5 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on August 27, 2019).
99.18		Equity and Asset Purchase Agreement, dated as of August 27, 2019, among Sears Hometown and Outlet Stores, Inc., Franchise Group Newco S, LLC, and Liberty Tax, Inc. (incorporated by reference to Exhibit 2.4 to the Form 8-K, filed by the Issuer with the Securities and Exchange Commission on August 27, 2019).

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: August 28, 2019				ESL PARTNERS, L.P.
				By: RBS Partners, L.P., as its general partner
				By: ESL Investments, Inc., as its general partner
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				RBS PARTNERS, L.P.
				By: ESL Investments, Inc., as its general partner
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				ESL INVESTMENTS, INC.
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				EDWARD S. LAMPERT
				By:		/s/ Edward S. Lampert

ANNEX B

RECENT TRANSACTIONS BY THE REPORTING PERSONS IN THE SECURITIES OF

SEARS HOMETOWN AND OUTLET STORES, INC.

 

Entity

Date of Transaction

Description of Transaction

Shares Disposed

Price Per Share

ESL Partners, L.P.

08/23/2019

Open Market Sales

95,470

(1)

$

2.56

 

(1)

Represents the number of shares of common stock, par value $0.01 per share (the Common Stock), of Sears Hometown and Outlet Stores, Inc., over which ESL Partners, L.P. (Partners) divested beneficial ownership for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, following open market sales of shares of Common Stock held in separate accounts controlled by Partners or its designee that were established on behalf of, and for the benefit of, those limited partners that previously redeemed all of their interest in Partners (the Redeeming Limited Partners) in lieu of Partners withholding a reasonable reserve from the amounts that would have otherwise been distributable to such Redeeming Limited Partners for the purpose of satisfying the relevant Redeeming Limited Partners share of any contingent liabilities of, or claims against, Partners.