CONTACT:

Sears Public Relations And Communications
 
(847) 286-8371

Kmart Announces Preliminary Footstar Settlement

    HOFFMAN ESTATES, Ill., July 8 /PRNewswire-FirstCall/ -- Kmart Corporation,
a subsidiary of Sears Holdings Corporation (Nasdaq: SHLD), announced today
that it has entered into a agreement with Footstar, Inc. providing for a
comprehensive settlement of the litigation pending in Footstar's bankruptcy
case concerning the assumption of the Master Agreement that grants Footstar a
license to operate the footwear departments in all Kmart stores.
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20050324/CGTH017LOGO )
    The settlement provides for Footstar to assume an amended and restated
Master Agreement which will require Kmart to be paid $45 million as a "cure
claim" on account of all of Kmart's claims for unpaid dividends, return of
capital and damages; provide for compensation to Footstar in the event that
Kmart disposes of, closes or converts in excess of an agreed upon number of
stores each year; and shorten the remaining term of the relationship from a
December 31, 2012 expiration to a December 31, 2008 expiration.  The
settlement is subject to the approval of the Bankruptcy Court presiding over
Footstar's bankruptcy.  A hearing on the matter is scheduled for
August 18, 2005.

    About Sears Holdings Corporation

    Sears Holdings Corporation is the nation's third largest broadline
retailer, with approximately $55 billion in annual revenues, and with
approximately 3,800 full-line and specialty retail stores in the United States
and Canada.  Sears Holdings is the leading home appliance retailer as well as
a leader in tools, lawn and garden, home electronics and automotive repair and
maintenance.  Key proprietary brands include Kenmore, Craftsman and DieHard,
and a broad apparel offering, including such well-known labels as Lands' End,
Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands.
It also has Martha Stewart Everyday products, which are offered exclusively in
the U.S. by Kmart and in Canada by Sears Canada. The company is the nation's
largest provider of home services, with more than 14 million service calls
made annually.  For more information, visit Sears Holdings' website at
http://www.searsholdings.com .

    About Kmart

    Kmart, a wholly owned subsidiary of Sears Holdings Corporation
(Nasdaq: SHLD), is a mass merchandising company that offers customers quality
products through a portfolio of exclusive brands that include Thalia Sodi,
Jaclyn Smith, Joe Boxer, Martha Stewart Everyday and Route 66.  For more
information visit the company's website at http://www.kmart.com or the Sears
Holdings Corporation website at http://www.searsholdings.com .

    Forward-Looking Statements

    This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.  Such statements
include, but are not limited to, benefits to Kmart Corporation, Kmart Holdings
Corporation or Sears Holdings arising from the settlement of claims with
Footstar, statements about future financial and operating results and plans,
objectives, expectations and intentions and other statements that are not
historical facts.  Such statements are based upon the current beliefs and
expectations of management and are subject to significant risks and
uncertainties.  Actual results may differ from those set forth in the forward-
looking statements.  These forward-looking statements speak only as of the
time first made, and no undertaking has been made to update or revise them as
more information becomes available.

SOURCE  Sears Holdings Corporation





 
Web site:  http://www.searsholdings.com http://www.kmart.com 
  

 
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CONTACT: Sears Holdings Public Relations, +1-847-286-8371
  

 
CAPTION: CGTH017LOGO    Sears Holdings Corporation logo.
 (PRNewsFoto)[TC]        TROY, MI USA    03/24/2005